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I would like to thank your Prime Minister Helen Clark and the New Zealand Government for the invitation to be present at this special occasion tonight. New Zealand has already been magnanimous in honouring me for my contribution to CER. Now, 20 years later it is quite overcoming that one is still remembered. Ex politicians, whether dead or alive, are generally buried.
I love coming to New Zealand, and to come for such an occasion as this and then to have a holiday here with my wife is the most wonderful experience. I have always been a great ambassador for New Zealand and talk of it as the most beautiful country in the world. And for quite the modest fellow that I am, and an Australian at that, it is a considerable statement.
The visit also permits me to renew many friendships. Friends who were architects of CER and who deserve credit for their courage in their support of the proposal 20 years ago. I would like to mention just a few people like Brian Talboys and Hugh Templeton, and Harry Clark of Trade and Industry and Bernie Galvin of the Prime Minister’s Department. I know that these people and others involved must, like myself, breathe a sigh of relief - and a little surprise - that CER has been so successful and so universally acclaimed.
It would be flattering to tell you that CER had its beginnings after a careful analysis; a detailed weighing of the issues. But it wasn’t.
CER was borne largely out of exasperation and frustration on a flight from Hong Kong to New Zealand with the head of my Department Jim Scully. We had been in Europe, North America and Japan catching up on our trade negotiations under the GATT round. Trading blocks were being talked about in Europe, North America and Asia. With mounting unease I thought about the unimaginative framework that governed our trade with NZ. I re-read my brief. It was a tired re-run of trivial issues that had dogged us for years. New Zealand was focused on wallets, taps and cocks and frozen peas. Australia had a begging list for improved quotas into New Zealand. If the discussions had turned out successfully it would not have made a material difference to a company, let alone a country. It was trivial. It did not warrant a meeting at any level. Certainly not a Ministerial one.
So at our first meeting with Ministers and Officials I asked that the agenda be put aside and that we begin to think and develop a new framework for economic cooperation. Everything should be on the table without any preconceived ideas about the nature of any agreement.
I of course had no Cabinet backing. The New Zealand Ministers naturally had no basis to begin talking until Prime Minister Muldoon was sounded out. A meeting was urgently arranged. I noted that New Zealand Ministers and officials were receptive, but initially Rob Muldoon was quiet and said little. I suspect that he was looking for an Australian ambush. By the end of the meeting we had the go-ahead to explore possibilities.
There were certainly many hitches and stumbling blocks in the early years, but I must say I had a very good rapport with Muldoon. Strangely, I seemed to have his confidence. Maybe because I was a good listener and only worried about the nitty-gritty bits.
Discussions between our two PM’s were not quite as harmonious. Their attitudes were as different as their heights and on a couple of occasions I mentally observed the CER wheels spinning in reverse. I recall that Malcolm Fraser dreaded the possibility that when all was concluded Rob would declare that he had bested Australia. Sure enough a couple of months later Rob made a public statement that he believed he had got the best of the bargain. Within an hour the press descended on me. I replied that if he feels like that I am happy. Then with a smile on my face said “As a cattle dealer I have always made my customer feel that he got a good deal”. They laughed, and the matter was forgotten.
The history of the CER negotiations is well documented and needs no further comment from me. As events have unfolded CER has been a remarkable success for both our countries. I am told that WTO rated it as the best and most comprehensive trade agreement and is used as an example for other countries.
Since our initial agreement, considerable progress has been accomplished in further interlocking our economic activities in areas such as company law and taxation and I know much more work is being listed for examination such as the coding of food standards and pharmaceutical products. There is still, however, considerable potential and more work needs to be done.
Today the benefits for CER are so commonplace and are so self evident that it rarely attracts attention in any part of the world. By slowly phasing out tariffs and quota obstacles, trade barriers have been eliminated between us.
But it needed a beginning and I like to think that the CER showed the way for tariff and other economic reform in both our countries. The task was comparatively greater for New Zealand than Australia and I would like to pay tribute to the wisdom and determination of Roger Douglas who brought on reform at a pace which few of us thought possible.
It is timely to reflect on that because there is a temptation to see the work of CER as nearly complete. I disagree. To me the United States was the first great free trade area - no barrier between states and a common currency. Australia itself is another example. The EU is now expanding tremendously and the barriers there - which were often hidden - are fast disappearing. Surely we have more work to do. “Continuous improvement and outward looking” were meant to be the guiding lights for CER. So with considerable enthusiasm and hope, I would like to suggest a number of areas where with determination we may well advance our common cause.
When I first started thinking about closer relations I knew it would start a process that would expand and expand. Natural economic and political boundaries would be lent on. The new benefits would become obvious. I like to refer to it as the “nudging theory”. Push too hard and there will be resistance. By quietly allowing time for ideas to digest was the way to go.
One of the big future issues I’d like to focus on is a common currency. This keystone issue would only make sense if all our basic fiscal and monetary policies were in broad alignment - in short as a means of keeping Central Banks dominant and politicians disciplined with their economic levers. We are already close in so many economic areas that there is no real urgency other than gentle nudging now and then. But if we looked at this development could we not include PNG and the Pacific Islands in our thinking on a common currency? I realise this is difficult thinking, yet it could be a means of giving stability to these countries. I do not see how Australia and New Zealand can comfortably contemplate these countries following their present economic trends for too far in the future.
Then, with a deep breath and some imagination, perhaps the US dollar could be the common currency that we speak of. The current negotiations by Australia for a free trade agreement with the United States could be an early starting point for such an examination.
In short, if the move to free trade in both our countries were assisted by the CER, could not sound harmonised economic policies in the region also confer on us great benefits. In a world of emerging great trading blocs I do not want to see us remote and irrelevant to the new order.
Twenty years ago we resolved that when either country took a major step we would be conscious of the impact on the other. We seem to have done well here and one mechanism of great value is that New Zealand Ministers sit in on formal meetings when Australian Federal Ministers meet with their State opposite numbers. That is a good working model. Could not some formal group be established so that as issues come up in our negotiations with the US we can ensure that we understand fully the impact on New Zealand? I carried scars and grudges after the UK joined the EEC without keeping us fully informed. Australia must not do the same with New Zealand - it would be unworthy. Without nudging too far maybe it is a suitable time for New Zealand to think about this issue too.
There are so many other areas we should explore. Our immigration policy is now skills based, and wisely so, but cannot we make a special effort to ensure that New Zealand is fully aware of the opportunities that exist? In the promotion of tourism could not some part of our respective budget be pitched at packaging the attraction of the two countries? Just as the idea of mutual shareholdings and packaging in each other’s airlines has obvious potential for economies.
In my concept the list for cooperation would be comprehensive. Economies of scale could be found in joint censorship and administration of radio and television licensing. Commercial arrangements such as insurance and banking supervision could be examined with the aim of joint/lower cost administration. Quarantine is listed for examination in the US free trade examination. What about common drivers licenses, common passports? Only imagination limits our scope for cooperation and action.
Finally there is the studiously avoided question of political union in the future. Only New Zealand nudging will ever make that a reality. From the Australian perspective I do not think it is an issue that sparks concern. For all intents and purposes as CER expands we are binding ourselves closely together as one.
The thought of political union did occur to me during early negotiations. As leader of the National Country Party I did not recoil in horror from the possibility of increased rural representation in a joint Parliament. Increasing the Senate by two states would give a 25 percent increase of rural minded representatives from New Zealand. This could be advantageous to the rural community whose influence is slowly being eroded by urban development.
Then reality took hold. Stay with the business on hand. And I did.
Thank you for your attention.
27 March 2003
Wellington
