REVENED PA
15 JUN
PA
CONFIDENTIAL
RECORD OF A MEETING BETWEEN THE MINISTER OF STATE FOR FOREIGN AND COMMONWEALTH AFFAIRS AND THE NEW ZEALAND HIGH COMMISSIONER
No HELD AT THE FOREIGN AND COMMONWEALTH OFFICE ON TUESDAY 5 JUNE
1979 AT 1030
1025
Present
Mr Peter Blaker MP
HE The Hon Sir Douglas Carter KCMG
Mr S G Cook
Mr B J Lynch
BRITISH INVOLVEMENT IN THE SOUTH PACIFIC
1. After an exchange of courtesies, Sir Douglas Carter described how New Zealand's viewpoint was changing. In every sphere, he said, her actions would be guided by her South Pacific perspective. The Russians were keen to gain a foothold in the region, so every hiccup
in the small island countries could have repercussions. New Zealand
and Australia could not "carry the burden", which was not merely financial, on their own. It would be comforting to know that the British presence in the South Pacific would not diminish too fast, and that Britain would continue to offer advice and assistance when
necessary. Mr Blaker hoped that we would continue to take a close interest in the South Pacific. We were very concerned to reduce public spending and could not tell until the financial review had been completed how we should deploy our resources. But the Government fully understood the importance of the region from New Zealand's point of view.
NEW ZEALAND ECONOMY
2.
Commenting that New Zealand's oil import bill had increased five or six-fold since 1973, Sir Douglas Carter predicted that the next New Zealand budget would be the severest ever. He acknowledged that the Maui gas field was a valuable discovery for New Zealand (though production of oil condensate would be expensive to develop), and that beef and wool exports had taken a turn for the better in recent months. But New Zealand's terms of trade had declined by 40% since 1973. Recalling that 70% of her export income came from primary agricultural products, he expressed dismay that EEC levies had so increased the price of butter that British butter consumption had
/fallen
CONFIDENTIAL
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