watched

Link over Tasman watched

New Zealand and Australia are moving towards a common policy in their trading relation ships with Pacific Island coun tries.

This is the forecast outcome of recent talks in New Zealand between the two prime minis ters, Mr Fraser of Australia and Mr Muldoon of New Zealand.

The main thrust of their talks was to establish closer econ omic links between their two countries, but at the same time to establish a unified attitude

towards trade and economic links with Island countries in

the region.

In a statement issued after the talks the two prime minis ters said they believed a closer relationship would, in itself, benefit the South Pacific re

gional economy.

Island leaders are watching the situation with interest be cause they fail to see how closer links between the two devel oped countries in the region will necessarily benefit their own economies.

Fiji and Papua New Guinea have already advocated that New Zealand should lower some import restrictions and show greater trade preference to Island regional countries.

Mr Fraser told the Aus tralian Parliament recently that if Australia and New Zealand could co-operate more closely they would have a stronger base for expanding their econ omic links with the South Pa cific and South east Asia. He said that he and Mr Muldoon had agreed on broad principles for further development and diversification of the economic relationship, and guidelines had been set for further study by government officials.

The objective would be the reduction and desirably the elimination of all barriers to trans-Tasman trade on all

goods produced in either

country, over a reasonable period of time,’ he said.

Mr Fraser told parliament that no commitment to any specific proposal had been made at this stage and no de cision would be taken until the studies had been completed and there had been consul tation with interested parties in both countries.

Mr Fraser said it was not possible at this stage to set down a firm timetable leading to further decisions by govern ments. Meanwhile the New Zealand-Australia Free Trade Agreement (NAFTA) would continue and the existing Australia-New Zealand agree ment on tariffs and tariff pref erences, due for review in November this year, would continue for at least one year.