Working Note by Chairman of the Inter-Departmental Working Party

Wellington, 21 November 1979

Members of Inter-Departmental Working Party on Australia/New Zealand Economic Relations

Australia - New Zealand Economic Cooperation

1. At its meeting on 13 November the Working Party agreed that the following work would be undertaken by Departments: 1. Tariff and Non-Tariff Barrier Removal Study
   1. The Department of Trade and Industry, with appropriate support from Treasury, Customs and Foreign Affairs, will obtain from selected members of the Manufacturers’ Federation, information to be used to further develop the ‘Trade Creation and Trade Diversion Paper’.
   2. The Ministry of Agriculture and Fisheries, with support from DTI and other departments as required, will reassess their paper in the light of additional material, including further information on Australia’s non-tariff barriers.
   3. On the basis of the work being undertaken under (a) and (b), consideration will have to be given to determining ‘the most desirable and practicable techniques that might be applied in achieving the elimination of tariff and non-tariff barriers between Australia and New Zealand over say five to seven years’.
      1. Administrative Adjustments Associated with Tariff Related Policies

Customs Department is preparing a paper in consultation with its Australian counterpart.

3. Effect of Elimination or Harmonisation of Industry Assistance Policies 

Treasury, in consultation with DTI and MAP, is examining the assistance provided to New Zealand industry by measures other than tariffs and import licensing with a view to assessing the effect of harmonising or eliminating Australian and New Zealand policies over five to seven years.

1. The 13 November meeting also agreed that Treasury would, in consultation with other departments, put together a paper exploring the possible dynamic effects of various forms of closer economic cooperation between the two countries. This ‘essay’ is to incorporate case studies illustrating at the micro-economic level the possible effects of changes to the forms of protection currently employed. In addition, it was agreed that George Bathgate would prepare the first draft of [a] comprehensive report drawing together conclusions reached from the various exercises undertaken by departments so far. (This paper was circulated to Working Party members on 19 November.)
2. The Department of Trade and Industry is preparing a paper, in consultation with Foreign Affairs, on joint marketing cooperation. The Ministry of Foreign Affairs is preparing papers on the Canberra Pact, and the possible effects of a changed Australia/New Zealand economic relationship on trade relations with third countries including, in consultation with Customs Department, any move to harmonise the Developing Country Preference Schemes of the two countries. (The Australians do not want these subjects to attract a high level of attention at this stage.) The Australians are preparing a draft paper for public consumption setting out guiding principles. The Reserve Bank is preparing a paper detailing problems that have arisen for specific New Zealand enterprises seeking to undertake direct investment in Australia.
3. It is proposed that a further meeting of the Working Party be held before the end of November to discuss the brief for the delegation expected to visit Canberra for talks on 12/13 December. It is not anticipated that any of the papers referred to in paras 1 and 2 above will be handed to the Australians at the meeting, though there might be value in handing over one or two of those referred to in paragraph 3 if they are ready. Papers are not being prepared on transport, joint promotion of tourism and cooperation in international economic fora, but the need for New Zealand to undertake work on these subjects will be reviewed in the light of further exploratory discussions in Canberra.
4. The purpose of the Canberra meeting is to lay the groundwork for Permanent Heads to meet again in late January or early February to reach understanding on the agenda for the Prime Ministers’ meeting. The Permanent Heads will have to reach a broad measure of understanding on the possible contents of a draft communique for the Prime Ministers. The 12/13 December meeting will therefore need to sort out the issues that are going to be reviewed by Permanent Heads and the form in which they will be placed before them. New Zealand Ministers will have to be consulted before the Permanent Heads meeting. It is therefore proposed that a further report, that will be based on the outcome of the 12/13 December meeting, should be submitted to CEC on 23 January.
5. It is proposed that at a meeting of the Working Party next week we discuss the sort of report that should be submitted to CEC in January, and therefore, the kind of understandings we should reach with Australian officials in December as to the character of the issues to be placed before Permanent Heads in the New Year. The contents of George Bathgate’s draft report (see para 2 above) could be a useful starting point for this discussion and it is suggested that members of the Working Party obtain the views of their departments (i.e., Permanent Heads) on the material contained in that report before the meeting.

[ABHS 950/Boxes1221-1226, 40/4/1 Part 22 Archives New Zealandffe Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]