“N.Z. To Seek Cut In U.K. Preference Margins”

Press, Volume XCVII, Issue 28552, 3 April 1958, Page 13

“N.Z. To Seek Cut In U.K. Preference Margins”

(N.Z. Press Association—Copyright)

(Rec. 8 p.m.) LONDON, April 2. New Zealand would seek a substantial cut in the preference margins at present enjoyed by United Kingdom goods in the New Zealand market during forthcoming trade talks with Britain, according to the diplomatic correspondent of the “Financial Times” today. The correspondent said that present indications were that New Zealand would ask for preference levels similar to those negotiated with Australia in 1956. These were 7} per cent, for most capital goods and industrial raw materials and 10 per cent, for other goods, compared with the present minimum preference margin of 20 per cent., with higher rates—3s per cent, on motor-cars, for example —for many British products.

The “Financial Times” correspondent said that the talks, due to open in London on April 17. would cover the whole range of British-New Zealand trade.

In theory the talks were not connected with the consultations on agricultural production and marketing policies in which tne Minister of Agriculture (Mr Skinner) would participate on April 18.

In fact, however, the correspondent said, it was possible that New Zealand’s attitude in the trade talks might well harden considerably as a result of the exchanges on agricultural matters. The correspondent said that it was unlikely that the British Government would be prepared to impose an anti-dumping duty, both because of the effect on the cost of living and the repercussions in countries such as Sweden and Eire, which were potential partners in the Free Trade Area.

The guaranteed price for milk was cut at the latest annual review and it was difficult to see what help could be given to New Zealand. The situation was bound to affect the wider trade talks since New Zealand would be all the more anxious to gain the right to cut preference margins substantially in order to give her greater bargaining strength with other potential customers for ner exports

Proportion Jigher The British side would certainly point out that Australia could not be looked upon as an analagous case, since the proportion of New Zealand's exports enjoying preferential treatment in the United Kingdom was much higher than that of Australia. Moreover, some of the preferences enjoyed by the United Kingdom in New Zealand were rendered inoperative by New Zealand's use of quota restrictions for protective purposes.

But some cuts in preferences appeared inevitable, even though New Zealand might well be overestimating the extent of the markets which she would be able to open up for her products in third countries as a result. the “Financial Times" said. The “News Chronicle” reported today that butter was now down to margarine prices in many British shops. New Zealand and Australian butter was 2s 3d a pound—the same as several brands of margarine.

Blended butter at 2s 2d a pound was even cheaper. And because the Danes were anxious to keep British customers, their butter was down to 2s fid a pound—the same price as the most expensive margarine, the “News Chronicle” added.