PRIME MINISTER
FOR PRESS 28 May 1978
ELECTORATE TALK
This year, important decisions will be made concerning the
international economy and world trade. The decisions will
be so important that they could well set the pattern to the
end of this century.
Australia is a great and significant trading nation. Therefore
we have much at stake.
We have a basic interest in an orderly and reasonable world
trading system that recognises the rights and responsibilities
of all nations.
We recognise the limits of our influence in world economic
affairs,* but at the same time it is our obligation to express
views that we hold firmly and to advance Australia's cause
in international forums at every opportunity.
This year is important because the Tokyo round trade negotiations
begun in 1973 are due to conclude in the middle of the year.
America is aiming for an outline package of conclusions by
mid-July.
I am concerned that if there is no positive advance in these
trade discussions that both Europe and the United States might
revert to protectionism.
President Carter has stood out against a protectionist Congress
with great strength. But if what are called the Multi Lateral
Trade Negotiations are not successful it would be harder to
withstand those pressures. Increasing protectionism in Europe
would also be likely.
A reversion to protectionism would lead to beggar-thy-neighbour
policies of the kind the world saw in the 1930' s with enormous
damage to many countries. Because Australia is a significant
trading country, we have a greater interest than most in
preventing that from happening.
My talks with the Prime Minister of Japan a few weeks ago
concentrated on these issues. Japan also relies heavily on
trade, upon access to markets in Europe and in America. We
found a remarkable identity of view and agreed to cooperate
and consult closely.
Australia believes there will be no success at these trade
negotiations unless industrial goods, agriculture and commodities
are all included in the final result.
In the past, when there have been significant world trade
meetings Europe and America made agreements about industrial
goods but then they put agriculture aside.-in the " too hard"
basket. While there are rules for fair trade in industrial
goods, nations seem to reserve to themselves the right to have
arbitrary restrictions on access to markets in agriculture and
in comnmodities,.
Over the next few months we will be trying to see that rules
for fair trade in agriculture are promoted. Let me explain
why this is so important.
Trading nations need an expansion of markets. That will lead
to an expansion of trade.
It is only through an expansion of markets that we will be
able to provide for increased output from our factories, from
our farms and from our mines. Increased output, increased
demand will lead to increased employment. It is the same in
many countries.
If world markets do not expand, nations are going to be left
arguing about the cut-up of existing markets and that will
do nothing for unemployment around the world.
Under the guise of calling for a 40% tariff cut the major
industrial nations have put forward a proposal which in fact
is little more on average than a half a percent reduction in
tariffs a year for eight years. In the first five years
those reductions would be mandatory under the formula.
Aeductions in the last three years would de-. cnd u-, on the
economic circumstances of the time. The programme would start
in 1980.
This proposal of the formula applied to industrial items
would cover less than 20% of world trade. It is not therefore
a proposal of itself which can lead to an expansion of markets
and an increase in world trade.
That just underlines the importance of making sure that
agriculture and commodities are part of the arrangements at
the Multi Lateral Trade Negotiations to broaden the scope,
the coverage of the agreements. That is important from a.
number of points of view.
The application of the formula to industrial goods would cover
about 40% of the exports of Northern America and of Europe
but only about 5% of Australia's exports.
Developing countries need fairer terms of trade they need
arrangements that will give them commodity and price stability. ./ 3
Australia has some experience in that.
For a long time we have been involved in the International
Sugar Agreement, in the International Wheat Agreements, and
we operate a wool marketing proposal which works greatly to
the advantage of consumers and producers. It brings
stability and predictability at a reasonable price into the
trade. If it is possible for these commodities, it is possible for
others. Australia has been trying to take a position that would bring
the developed and developing world closer together.
Through the last six months we have had some success, but it
is enormously important to bring in the developing world with
their tens of millions of people in need of more schools,
better hospitals and all the infrastructure of government.
That is not only a need in itself, but economic take-off in
the developing world could well be a significant factor in
providing a boost to markets and an expansion of demand that
could sustain economic recovery through to the end of this
century. So Australia does not base its plea and-argument for a
better deal for the developing world on idealism alone.
We base it on the mutual self interest and economic interdependence
of all nations, developing and developed alike..
On Wednesday I leave to further the discussions I had with
the Prime Minister of Japan, with the Prime Ministers of
Britain, of France and the Chancellor of Germany. They will
be having an economic Summit meeting in Bonn in July, and
their counsels will be of enormous importance in helping
to come to a realistic and responsible conclusion.
Following these discussions I will be holding further talks
with Mr Lee Kuan Yew, Prime Minister of Singapore. The
Prime Minister and I will then meet with the Prime Minister
of Malaysia in Kuala Lumpur.
Amongst other things, we will be discussing the-general
world trade position as a result of my discussions in Europe,
especially as they relate to the developing world.
Australia has the desire to consult closely with countries
in our region on these issues, as they are dependent on access
to the great markets of the major industrialised countries.
Australia today has special international obligations which
are being met.
We are taking a determined and vigorous part in negotiations
on world economic issues. We owe this to our own community.
Our meetings over the next three weeks further demonstrate
our desire to continue to act as a responsible member of the
international community.