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Wednesday, 11 April 1973


Mr ANTHONY (Richmond) - I thank you, Mr Deputy Speaker, and I thank honourable members. I want to take only a few minutes in this debate. Firstly I should like to compliment the Minister for Overseas Trade (Dr J. F. Cairns) for a fairly comprehensive statement relating to the New Zealand-Australia Free Trade Agreement talks which took place between him and Mr Freer in New Zealand. I should like to thank the honourable member for Hotham (Mr Chipp) for his remarks about the part that I played in previous discussions with the New Zealand Government on the continuation of this agreement which was established initially by Sir John McEwen and Mr Jack Marshall. The statement really deals in generalities. It expresses a spirit of willingness to co-operate with New Zealand to bring about a free trade area.

A number of assumptions are made in regard to matters which were discussed with the intention of further developing ideas. I regret that the Minister for Overseas Trade (Dr J. F. Cairns) has not further amplified some of these matters. But he did mention that there will be further discussions in 6 months time and perhaps after those discussions we might receive more details. The Minister talked about the joint development of economies of both countries and the complementary use of resources in each country. This sort of thing has been happening to date to a limited degree. I would say that the most notable example would be the development of the Manapouri power resources for the conversion of alumina into aluminium. Australia is getting the advantage of New Zealand's cheap power and New Zealand is using Australian resources.

The Minister made the point that the discussions centred mainly on the exchange of manufactured goods and the development of secondary industries in both countries. Questions relating to primary products remained very much as they have been in the past and this was only a secondary matter. I think the point that the Minister makes in relation to the development of secondary trade is that relating to Article 3:7 and the further modification to introduce a transitional phase between the application of Article 3:7 and listing on schedule A. I see this as being of considerable significance. It is a progressive move and I support the Minister in this proposal, although I do not quite see how it is to be implemented or how it will work. At the moment Article 3:7 really relates to an arrangement that is arrived at between an exporter in one country and the manufacturers or competitors in another country. Until arrangements are made whereby there is harmony between the interests of both countries, there is not an exchange of letters accepting the situation. This is a matter which requires private discussions between individual companies. I am not quite sure in my own mind how this can be furthered. No doubt, the Department of Overseas Trade has ideas on this matter, otherwise it would not have been proposed. If it can be developed, I welcome it. I think it is a good step forward.

It is true that it is a big step from Article 3:7 to schedule A and I have found a good deal of inhibition on the part of New Zealand manufacturers in taking the step to compete completely with Australian industries. They wanted a degree of protection and the protection afforded has been not by tariff but by the use of import quotas. I can understand their reservation and fear. This is fairly natural in any country. But I would hope we can find a way of breaking down that fear so that we can move more and more towards the objective of free trade and a more integrated economic relationship between the 2 countries.

The Minister for Overseas Trade, confirming really what was said by previous governments, on page 4 of his statement said:

It was understood that the appropriate arrangements for meeting the needs of this sector-

He was referring to the primary industry sector - particularly with respect to meat and dairy products - would be a continuation of co-operation between both countries in third markets rather than the Introduction of disruptive competition in each other's domestic market.

That certainly has been the policy in the past and I welcome this statement. It would be utterly foolish for 2 countries which have the objective of working closely together to try to wreck each other's pricing and production arrangements. Both Australia and New Zealand are large producers, by world standards, of meat and dairy products. To try to compete in each other's domestic market can do only harm. It can only be disruptive and react to the disadvantage of the producers in the 2 countries. Consumers temporarily might get some advantage, but if this means undermining the security of large primary industries in either country, it is not in the national interest.

As both Australia and New Zealand are major producers of meat and dairy products, we have much to sell on other markets of the world. It is important that there is cooperation, particularly in regard to dairy products. The virtual exclusion now of Australia from the United Kingdom market means that we will have to look vigorously for markets in other parts of the world, such as Japan, South East Asia and the Middle East countries. New Zealand, while obtaining some advantage in the United Kingdom during the 5 years transitional period, will not be able to satisfy her total export requirements and therefore she too will have to look for other markets. If there is going to be a dog fight as to who can get access and advantage in these other markets, we will find that both countries will push the prices down to ruinously low levels. Of course, this does not apply to meat. I do not see any great fear in regard to the prospects for meat because there is a world wide shortage and all the prognostications are that this shortage will continue to grow. Both Australia and New Zealand will have great opportunities to satisfy the demand for meat.

However, for dairy products the picture is much more difficult. The critical thing about keeping New Zealand dairy products out of Australia is that if they were to come in it would completely undermine the equalisation arrangements which operate in Australia for stabilisation and price arrangements. I believe that the prices for dairy products, particularly butter and cheese, in this country, are low in comparison to prices in other countries. Only those countries which are getting the benefit of export production surpluses from other countries receive the benefit of low prices. We could find a situation when New Zealand is excluded from the Common Market whereby both Australia and New Zealand have a surplus to dump on markets which are not large consumers of dairy products and, naturally, this will depress the prices. This is what both Australia and New Zealand must watch very closely.

The Minister for Overseas Trade made brief reference to the question of forest products. He said that there had been talks and progress had been made, and that was the end of the sentence. I would have liked a little more explanation as to what this progress really meant. The area of greatest concern for New Zealand at the moment is the pricing arrangements for newsprint exported to Australia. I have been involved in discussions in this area for 2 years. We have an arrangement whereby New Zealand has the right to 89 per cent of the Australian market for imported paper. But the problem has been not to get access to the Australian market, which we allow duty free, but the pricing arrangements - what price Australian newsprint users will have to pay. I presume it is in this area that the Minister is saying that progress has been made. He shakes his head, indicating that this is not an area. I presume that no progress has been made in that area and the position remains as it was previously. Perhaps it is in relation to timber products whereby there can be an exchange of Australian hardwoods to New Zealand and greater access of softwood timbers into Australia. Perhaps it is in relation to some of the manufactured products, such as tissue paper. It may be in relation to hardboard, corrugated paper products in the use of cartons. I do not know, but no doubt when the Minister is in a position to tell us more about these matters he will do so.

I certainly hope that in the process of developing arrangements between Australia and New Zealand full cognizance will be taken of the industries in each country. To try to override or to abruptly disrupt industries in either country will only set us back on the course that we have been following, and following successfully for many years. We have to be conscious of the fact that New Zealand has a problem in relation to the development of secondary industries, although I believe she has made outstanding progress. The fact that there has been rationalisation and complementary development of the motor industry with components and parts shows that these things can be accomplished provided there is a willingness on the part of international companies to do it. The Ford company, Chrysler Australia Ltd and General Motors-Holden's Pty Ltd have played a significant role in this area. I hope that other companies will be able to find ways and means of allowing part of their production to take place in New Zealand and for the components to be assembled and so have the advantage of the economies of scale which a 16 million people market offers instead of a 3 million or a 13 million market in New Zealand and Australia respectively. This makes good sense and I am pleased to see that the Minister has been forthcoming in continuing the policies that have been established by previous governments and this certainly has the support of members on this side of the House.

Debate (on motion by Mr Nicholls) adjourned.







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