Butter Marketing

Press, Volume CI, Issue 29735, 31 January 1962, Page 12

Butter Marketing

The General Agreement on Tariffs and Trade conference on butter marketing, held at Geneva last week, has proved disappointing to New Zealand, which was the prime mover in arranging the meeting. A statement by the Prime Minister (Mr Holyoake) emphasises that a somewhat ambiguous press report from Geneva would be misleading if it were interpreted too optimistically. According to information the Government has from the New Zealand delegation, no agreement was reached on the limitation of supplies to the British market after March, 1962. It will be recalled that last November the British Government invited countries sending butter to Britain to limit their shipments to figures proposed at a special G.A.T.T. meeting held two months before. Countries which did not accept the invitation to voluntary restraint would meet countervailing duties levied by the British Government In the event voluntary limitation was accepted by all countries except Eire, against which duties were applied. The effect of the proposal was to keep about 20,000 tons of butter off the British market in the five months. But this expedient would obviously serve no lasting purpose if at the end of the period of restraint the original over-supply of the market was resumed. Indeed, the situation would be aggravated if a substantial portion of the withheld butter was added to new supplies. Thus, the first purpose of last week’s conference was to decide what would happen when the restrictions applied by the British Government expired on March 31. The press report from Geneva said that the 20 countries meeting at Geneva had agreed to continue limiting supplies of butter to Britain to prevent a serious situation again arising. But the New Zealand Government's advice leads it to place little on this undertaking, if indeed one was given. It seems, therefore, that the two months ahead must be exceedingly difficult ones from the New Zealand viewpoint New Zealand will

be negotiating anxiously to prevent the collapse of the butter market. While pressing on the supplying countries the need for and the advantages of restraint. New Zealand will consult the British Government about its attitude in the event of a refusal by suppliers to continue voluntarily to restrict supplies. To be consistent, the British Government would be expected to resume its threat to levy countervailing duties against countries not agreeing to restrict supplies of dumped or subsidised butter. If that attitude was in the interests of Britain and of its butter suppliers last November, it is in their interests now, though Britain’s position has not been made any easier by its negotiations to join the Common Market However, Britain took a courageous stand last November, and in a similar situation there is no reason to believe that it will be weaker now.