TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 49

CONFIDENTIAL

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Document No. 23

RECORD OF CONVERSATION BETWEEN THE RIGHT HON. GEOFFREY RIPPON, Q C, M P, CHANCELLOR OF THE DUCHY OF LANCASTER, AND THE LEADER OF THE NEW ZEALAND OPPOSITION, Mr. N. E. KIRK, MP, AT WELLINGTON ON 22 SEPTEMBER, 1970

Present:

The Right Hon. Geoffrey Rippon, QC,

M P

HE Sir Arthur Galsworthy

Mr. Tickell

Mr. Norman Kirk

Difficulties for New Zealand caused by British entry into EEC

Mr. Kirk referred to the serious difficulties for New Zealand which would be created by British entry into the Community. It was no good thinking simply in terms of a transitional period, even one of so long as 10 years. New Zealand farmers, especially the smaller ones, were now in increasing difficulty anyway: greater production did not always mean higher income. They had so far been willing to accept a lower rate of return on capital invested than would be acceptable in other concerns, partly at least because they had enjoyed capital gains on sales of land. This would probably not continue. Farming was already very marginal in some areas, and the uncertainty inevitably created by the negotiations for British entry made things worse. People liked to know where they stood. Since the election of the Conservative Government in Britain, there was now the additional hazard of the possibility of the introduction of a levy system on agricultural exports to Britain.

2. Mr. Rippon said that food prices were artificially low, with the result that while other people's revenues kept pace with inflation, the farmer was lucky to remain where he was. The British Government intended to introduce levies in order to help the farmer and reduce taxation. When asked what would happen if the negotiations failed, Mr. Rippon said that the British would have to tighten their belts, which would also have its effect on New Zealand agricultural exports.

3. Mr. Kirk pointed out that this would in turn affect British exports to New Zealand, Mr. Rippon recognised this might happen. Trade patterns were changing and we all had to face the consequences.

Japan

4. Mr. Kirk asked what Mr. Rippon thought about the growing power of Japan. The Japanese were muscling their way in everywhere. If New Zealand obtained markets in Japan for her agricultural exports, the Japanese could well ask in return for some preferential treatment for their industrial goods which New Zealand now gave Britain. British shipping lines might also be pushed out.

Co-operation between United Kingdom and New Zealand during negotiations

5. Mr. Kirk said that it was galling for New Zealand to be powerless in a negotiation which affected her so deeply. Was it really necessary for the negotiations to be confined to the applicant countries and the Community?

CONFIDENTIAL