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U.S., Australian Officials To Discuss Pacific Defense Issues

August 11, 1986

SAN FRANCISCO (AP) _ Talks between the United States and Australia, at odds over a U.S. decision to sell subsidized wheat to the Soviets and Chinese, will be the most delicate between the two nations in 30 years, analysts say.

Secretary of State George Shultz and Secretary of Defense Caspar Weinberger head the U.S. delegation at the ANZUS Treaty conference.

Shultz greeted Australia’s Foreign Affairs Minister Bill Hayden at his Palo Alto home Sunday evening, with officials from both countries then attending a barbecue at the headquarters of Sunset magazine in nearby Menlo Park. The publisher of the magazine, William Lane, is the U.S. ambassador to Australia.

Shultz and Hayden had no comments for reporters.

Formal ANZUS talks were to be held at the Presidio of San Francisco on Monday.

Australia, representated at the talks by Hayden and Defense Minister Ken Beazley, has expressed anger over the Reagan administration’s grain sale announcement Tuesday.

The Australians complain that subsidized grain sold by the United States to the two Commmunist giants undercuts the price of Australian grain.

Political analysts in Australia say the discussions will be the most delicate negotiations between the two allies in more than 30 years.

Representatives of Australia, New Zealand and the United States have met annually for 35 years under the ANZUS Treaty to discuss military defense cooperation in the Southwest Pacific and other issues.

New Zealand was not invited to the conference because the United States has stopped defense cooperation with that country over a government policy preventing visits by U.S. warships.

New Zealand does not permit nuclear-powered ships or vessels carrying nuclear weapons to dock in its ports and harbors. Because the United States refuses to confirm or deny whether its ships carry nuclear weapons, no U.S. vessels may visit New Zealand.

The United States reciprocated by saying it was withdrawing from defense obligations to New Zealand, an action Shultz disclosed to New Zealand Prime Minister David Lange at a recent meeting in the Philippines.

Meanwhile, New Zealand Prime Minister David Lange said Sunday that Australia may be forced to choose between maintaining defense ties with the United States and his nation.

The United States could put conditions on its defense pact with Australia that could compromise its military cooperation with New Zealand, said Lange, who is attending a conference in Fiji.

″It’s ridiculous to think that Australia would compromise its security interests to accommodate New Zealand,″ he said.

Shultz publicly criticized the grain sale, an unusual action for a Cabinet member in the wake of an announced presidential decision. He said last week that the decision must have left the Soviets ″scratching their heads″ and that they ″must be chortling″ over it.

″There must be a lot of pluses to it because it has been decided - but I can’t think of any myself,″ Shultz said.

Shultz and Hayden agreed earlier this year to draw up a document confirming the bilateral military and political alliance between the two countries.

In the wake of the wheat sale announcement, the Australian government is reported to be under pressure from Australian conservatives to link U.S. trade with defense issues.

The decision also stirred anti-American sentiments among farm groups, normally supportive of the United States.

Australia’s powerful National Farmers Federation called on the Australian government to use the three U.S.-Australian joint defense facilities as a bargaining chip in negotiations to stop subsidies from being sold in competition with their exports.

The U.S. decision followed a record Australian balance of payments deficit of $8.75 billion for the 1985-86 fiscal year.

The two nations also are at odds over the Reagan administration’s refusal to impose economic sanctions on South Africa.

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