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Tuesday, 24 March 1987
Page: 1362

Mr McGAURAN —I direct my question to the Minister for Primary Industry and reface it by reminding the Minister of the memorandum of understanding which exists between the Australian and New Zealand governments as well as the respective dairy industries which restrains New Zealand dairy imports. I ask the Minister: Will the memorandum apply to any successful Department of Defence tender for dairy products or will this part of closer economic relations be abrogated and additional imports allowed? I further ask: Is the Minister considering either the termination or amendment of the memorandum at the CER review next year?

Mr KERIN —The Australian-New Zealand closer economic relations trade agreement was negotiated by the former Leader of the National Party and former Deputy Prime Minister, Mr Anthony. When we came to office we signed it. That was negotiated over quite a period. The arrangements between the two countries in trade in dairy products were all clearly set out. What the honourable member is partly referring to is that New Zealanders are eligible to tender for defence contracts for dairy products. That was always in the agreement and one would expect that while the agreement is in force that will remain in it. Part of the agreement centred on a memorandum of understanding between the two countries. When there are problems in dairy trade they will be settled either at the Australian Dairy Corporation to New Zealand Dairy Produce Board level or at the industry to industry level. While there are always tensions and frictions in those discussions, the problems have always been ironed out. The New Zealanders are sticking to their side of the bargain with respect to cheese imports into the country; that is, they have a percentage share of the growth in the market from the basis of a fixed percentage determined at the time.

Mr Lloyd —Does that include a defence tender on cheese?

Mr KERIN —I just covered that. That is already in the agreement. With the relative currency values between the two countries it is seen as pretty likely that there will be no development in trade. If we are talking about cheese, it is already covered by that part of the agreement whereby New Zealand is honouring the share of the trade between the two countries. I have recently written to Mr Saunders of the United Dairyfarmers of Victoria on that matter. I am quite happy to clarify the matter for the honourable member, but I point out that at the end of the day we cannot go around the world lecturing the world on the need for freer agricultural trade and being involved in a free trade agreement with our closest neighbour that has expanded exports in agricultural products between the two countries both ways by 90 per cent and then walk away from it because of a bit of gutlessness or pressure from the farm sector.

The agreement overall is working. Where there are tensions and frictions they can be resolved, if necessary, at the ministerial level. All these matters can be thrashed out in ongoing discussions between the two countries. This is basically a bit of agropolitical hype which honourable members opposite do not seem to be able to resist or explain truthfully.