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Wednesday, 11 April 1973
Page: 1304

Mr CHIPP (Hotham) - I would like to express the gratitude of myself and the Opposition to the Minister for Overseas Trade and Minister for Secondary Industry (Dr J. F. Cairns) for making a statement in this House on such an important matter. The Opposition should not really have to thank Government Ministers for doing this. Without trying to make cheap political capital on this point, let me say that I and all my colleagues on this side of the House have become deeply concerned of late at the number of statements of basic policy that are being announced outside this House and not brought into this House. Even the Minister himself, speaking at a textile industry function a few days ago, mentioned that textiles in the sensitive areas need not worry in the future and that he would appoint some special watchdog to take care of any short term difficulties that industry might be having. He said that the industry had no cause for alarm.

In the text of the Minister's statement I saw no reference to the future role of the Special Advisory Authority, Sir Frank Meere. What the Minister is proposing for the textile industry may be something with which the Opposition would thoroughly agree and would support, but we do not know what he is proposing apart from what we read in the newspapers or hear of speeches at a dinner. I believe that if this Parliament is to function properly, Ministers should be making statements on fundamental issues in this House so that they may be debated. On the issue of New Zealand-Australia trade relations I commend the Minister. He returned from New Zealand only 10 days ago. I am not critical at all of him or the Treasurer (Mr Crean), who recently returned from an overseas trip and gave a Press conference. I support that.

Mr Crean - There will be a statement made tomorrow.

Mr CHIPP - I would expect that of the honourable gentleman. Of course Press conferences have to be given, but if this House could be informed of the results of such visits at the earliest possible time it would help this institution. It was refreshing to hear the Minister acknowledge the work done by previous governments. He mentioned the right honourable Sir John McEwen. He did not mention the present Leader of the Australian Country Party (Mr Anthony) but I am sure that he also joined the right honourable gentleman in that acknowledgment. At the end of his speech the Minister very graciously paid a tribute to the co-operation of Mr Freer, the New Zealand Minister for Trade and Industry. Off the cuff - it did not appear in his printed statement - he paid tribute to the officials of his own Department. I had a note to mention that, too. The Opposition believes that the statement made by the Minister for Overseas Trade was an excellent one. We support what he has done, what he has tried to do and what he is trying to do in this area because it is really a follow on, as he calls it - a different phase of the policies we started. Having been a Minister myself, I know that when a Minister goes to a conference with a Minister from another country he is preceded by officials of his own department who have prior discussions with officials from that other country. Without taking away from the work of the Minister himself one bit, I join with him in paying a tribute to the officials of his Department.

It was also refreshing to hear my honourable friend talk about free trade again. He was talking about the New Zealand-Australia Free Trade Agreement, which is the subject of the statement. I do not know when I have heard him enjoy himself so much for a long time, because I believe that this is the true philosophy of the Minister for Overseas Trade. Those of us who have noted his statements and studied them carefully in recent times have been disappointed at the 180 degree turn which the honourable gentleman has taken in the last 2 years on trade philosophy. I have in my office a copy of a speech which he made 2 years ago which, I suggest, is a model for any country like Australia to follow in overseas trade relations. It contained a great deal of courageous material. I have no doubt that trade unions and other pressure groups in the community, such as employer pressure groups, which sometimes can be as irresponsible and selfish as any trade union pressure group, have got to him. I am disappointed that the speeches he made in the last 18 months to 2 years seemed to go in the reverse direction. He is now back to the very strong protectionist philosophy that the Australian Labor Party had in its early times. I look forward to an early statement by the Minister in this House about his philosophy and Government policy generally on trade as they now stand. Without trying to cause mischief in the Australian Labor Party, I personally hope that the Minister will return to his early philosophy, which I believe he still holds. That philosophy is supported by the Minister for Social Security (Mr Hayden) and others in the Cabinet. I wish him well in the forthcoming battles in Cabinet.

As I said before, the Minister's visit and discussions were a follow on from the previous Government's negotiations with the New Zealand Government. In his statement the Minister indicated the success of this Agreement. He said that the growth of trade between the 2 countries has increased from $218m in 1965-66 to $390m in 1972- a growth rate in trade of 78 per cent over that 7-year period. In any terms this should be described as pleasing. The Minister paid some attention to Article 3:7 of the Agreement. It reads:

In relation to goods nol at the time listed in Schedule A to this Agreement, the Member States may agree on and implement special measures beneficial to the trade and development of each Member State and designed to further the objectives of this Agreement. Such measures may include the remission or reduction of duties on agreed goods or classes of goods in part or in whole.

As I understand it, the purpose of Article 3:7 is to find some half way house between the duty free treatment envisaged for goods in Schedule A - which goods are specified in Schedule A and accorded duty free treatment - and the treatment accorded to other goods on which highly protective tariffs may presently obtain. It is wide enough to allow a variety of approaches to stimulate the 2-way flow of goods between Australia and New Zealand without immediately going the full distance of including these products in Schedule A to which the Minister referred. Once a product has been included in Schedule A, both governments are reluctant to see it withdrawn, even though there are procedures in the Agreement to enable this to be done. I will refer to that in a moment.

According to the Minister's own Department, in 179 cases where trade under Article 3:7 has been approved there have been case by case variations in detail and approach, but one central feature has been present in the majority of them. This feature is the temporary elimination of duty into Australia for the specified New Zealand goods and, for the Australian goods, the availability of an import licence entitlement in New Zealand or import licence entitlement and duty reduction. As each Article 3:7 proposal must have the approval of both governments a set of criteria has been established against which to measure each proposal. Here is a point that the Minister properly brought out in his statement: The proposals are initiated not by the governments but by businessmen in each country, who agree on the details of a mutually satisfactory trading arrangement and then submit their proposal to their respective governments for approval. The 2 governments then examine the proposals against the criteria mentioned above. I wonder whether the Minister would agree with me that in the past this has been done quite well. It is reflected in the growth figures that he quoted. But these moves essentially have been made on a firm to firm basis between an individual company in Australia and an individual company in New Zealand. I would prefer - I suspect that the Minister would also - that in future this agreement which holds so much possibility and potential should be conducted on an industry basis. An Australian industry might move towards its counterpart in New Zealand on an industry to industry basis to get the best results from this agreement.

As the Minister said - I was pleased to hear him say it - the Government is not the initiator in these matters: The. initiative rests with business. Governments provide the machinery, such as this agreement, and provide assistance and advice. Governments have done this in the past and will do it in the future. The ultimate objective surely is to have more items included in Schedule A or under the auspices of Article 37 of the New Zealand-Australia Free Trade Agreement. The Minister referred to a third country and economies of scale. I thoroughly agree with that part of his statement. If Australia with its market of 13 million people and New Zealand with its market of 3 million people are to combine to have a common market for certain items then the resultant economies of scale, theoretically at least, must have an effect of reducing costs. Australia and New Zealand can also approach other countries jointly with a view to expanding the trade of Australia and New Zealand into those countries.

The Minister inferred that new industries should not be established in either country without consultation from an altruistic point of view on whether such establishment is good for NAFTA. The Minister is realistic enough to know that with established industries an Australian businessman will not be altruistic enough to say to a New Zealand counterpart: Your firm can do this a little better than mine. I will close up my industry and give you a free go at it.' But the Minister suggested that with the establishment of new industries there might be consultation. I thoroughly agree with him. However, I am just cynical enough to suspect that that proposition is a dream that sounds good but in the fierce world of business might never come true. If a businessman sees opportunity in Australia for the establishment of a certain industry I doubt whether he will consider the overall effects of Pacific trade and the benefits to Australia and New Zealand. But I wish the Minister and the Government good luck in anything that can be done to influence industry in this way.

On the question of economies of scale, the Minister mentioned things with which I agree and thoroughly support. But the history of NAFTA shows some disappointments. I will not take up the time of the House in discussing all those difficulties. The difficulties in relation to timber would be well known to the Minister. This would have been a matter mentioned in a good mannered way by Mr Freer or not mentioned at all but kept under the carpet at the recent talks. These difficulties arose, as the Minister knows, between Australian Paper Manufacturers Ltd and Tasman Pulp and Paper Co. Ltd in New Zealand. There was an unfortunate series of events with the manufacturers of lino board. A retaliatory action was taken by the Australian company in not accepting pulp from New Zealand. As far as I am informed that problem has been concluded reasonably satisfactorily.

I hope that future parties to arrangements under Article 3 : 7 or schedule A will have regard to the unfortunate incident concerning timber products and learn from it. When I express some disappointment at what NAFTA could have created but has not quite achieved I do not think that I am wrong in my assumption about one of the original thoughts behind the New Zealand-Australia Free Trade Agreement. (Extension of time granted). I thank the Minister and the House. I assume that one of the hopes behind the setting up of NAFTA was that if certain dairy products could be produced more efficiently and economically in New Zealand, with the dairy reconstruction scheme in Australia the production of those products in Australia might have been phased out. The quality and efficiency of the Australian dairy industry would have been improved, dairy produce supplied more cheaply to the Australian consumer and even New Zealand dairy produce allowed into Australia duty free. That has not happened and it did not happen under a Liberal PartyCountry Party Government. Therefore, I cannot be critical of the Government in this area.

I can appreciate the difficulties which are involved in the reconstruction of an industry. There are human problems as well as economic problems. It takes a lot of courage for governments to approach the people concerned and persuade them that it is in their best interests and the best interests of the nation to bring about changes.

I again wish the Minister for Overseas Trade good luck on the future of NAFTA. I wish him all the courage that will be needed for him to implement policies. The proposed changes will mean that some Australian industries willi have to be told: 'I am sorry. It is not economic or efficient or in the best interests of Australia for you to continue to receive protection. It is in the interests of NAFTA and both Australia and New Zealand for that protection to be reduced'. That will cause hardship and worry for 2 sections of the Australian community, namely, the trade unions concerned and the employers concerned, or perhaps members of the industry concerned.

I am not writing down the difficulties the Minister will have in this area. This proposal is palpably right. It is right for the Australian consumer and the New Zealand consumer and right overall for the labour force of both countries. It is right for the economic growth of both countries. It is right for the economic security and viability of this region. If it is right I believe that with courage and persuasion, both trade unions and employers can be and must be convinced that selfish devotion to their own industry or company is not in the national interest. I am pleased to say that the Opposition supports what the Minister for Overseas Trade has done and we thank him for his grace in acknowledging the work of previous governments and particularly the work of Sir John McEwen and the present Leader of the Australian Country Party, the honourable member for Richmond (Mr Anthony).

Motion (by Mr Nicholls) proposed:

That the debate be now adjourned.

Mr Lynch - May I ask the Leader of the House whether he will consider allowing the honourable member for Richmond (Mr Anthony) to speak at this stage. This is contrary to the arrangement that I had made with the Minister, but at that stage I was not aware that the honourable member for Richmond would wish to speak on this matter.

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