NEW ZEALAND

Created: 3/8/1978

OCR scan of the original document, errors are possible

JIMMY CARTEn LIBRARY MANDATORY ITEV1EW

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INTELLIGENCE AGENCY

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New Zealand: Prime Minister Muldoon has dominated the New Zealand political scene since his party's spectacular election victory over two years ago. Aggressive and direct, he is without peer in his National Party, and his governmentecord parliamentary majority.

Muldoon's political focus has been on efforts to revive New Zealand's seriously depressed economy. He has had only limited success in reducing double-digit inflationeavy foreign trade deficit. Exports of wool, lamb, beef, and dairy products are the lifeblood of the New Zealand economy. The government has been engagedesperate and largely fruitless effort to maintain export levels in the face of reduced sales to the UK after London joined the Coitmon Market and Japan balked at buying more New Zealand goods.

The ANZUS treaty with the US and Australia is theof New Zealand's foreign policy. The neighboringis it3 area of special interest. Accepting that its

size and remote location limit itinor role in

world affairs. New Zealand sees the South Pacific as anwhich it can act for ANZUS in promoting stability along sea

and air routes vital to all three members.

anti-Soviet, Muldoon was in the forefront in

the alarm over Soviet stirrings in the South Pacific

years ago, when the Soviet Union triod unsuccessfully to

Tonga and Westorn Samoa into permitting port facilities

its fishing fleet. Now, however. New Zealand is in the

final stages of reaching an agreement with the Soviets toport calls for Soviet vessels licensed to fish in New

ile economic zonean agreement induced by

Soviet promises of substantial purchases of agricultural

New Zealand has been heavily dependent for years on US strategic protection, and Muldoon has stressed this dependence more than have his predecessors. He has eased the occasional strains that the ANZUS alliance suffered during the preceding Labor government. Although second to none in his high regard for the US, Muldoon's characteristic bluntness has prompted him on occasion to voice his genuine concern that New Zealand's commitment to the ANZUS relationship is no longer reciprocated. He views US foreign policyegitimate, vital concern of his government, and ho hopes the US will accept well-meaning criticism from time to tine. Arguing that his country can be an effective ANZUS partner only if it is economically strong, Muldoon mayitch for an increase in Newalready large exports to the DS, particularly of beef.

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