U.K. BUTTER IMPORTS

Press, Volume CI, Issue 29778, 22 March 1962, Page 7

U.K. BUTTER IMPORTS

Restrictions To Stay For Year fw Z ,P —Copyright) LONDON, March 20. The British Government announced today it had decided to restrict imports of butter into the United Kingdom for the period of 12 months beginning April 1. Licences would be issued for the import of up to 390,000 long tons. The President of the Board of Trade (Mr Frederick Erroll) made the announcement in the House of Commons when asked what the Government would do about butter imports after the current six-month period of restraint on shipments by exporting countries ended on March 31.

Mr Errol] said: “I hoped that during the current period of restraint the countries concerned would agree upon any further short-term measures which were necessary, but these hopes have been disappointed. “In the absence of inter-nationally-agreed arrangements the New Zealand dairy industry would be likely to suffer material injury from dumped or subsidised exports to the United Kingdom.

•"Therefore Her Majesty's Government have decided to restrict imports of butter into the United Kingdom for the period of 12 months beginning April I. 390,000 Long Tons “Licences will be issued for the import of up to 390.000 long tons. The general unport policy of Her Majesty’s Government remains unchanged by the exceptional action." Later, the Board of Trade said the arrangements for allocating quotas were not the same for all supplying countries.

A notice to importers giving full details of the licensing arrangements would be issued as soon as possible. The original six months’ restriction was to provide a breathing space in which the search for a longer-term solution to the surplus butter supplies on the British market could be continued, the Board of Trade said.

There was a widespread feeling in the working group of the General Agreements on Tariffs and Trade at Geneva in January that some form of short-term limitation on supplies to Britain was needed to prevent a serious situation again arising in the market. But there was no agreement on the necessary measures, the Board of Trade said. Details of Quotas The Board of Trade later gave the quotas for 12 months from April 1 as follows: Argentina, 9500 king tons; Australia, 62.000: Austria. 1700; Denmark. 91500; Finland, 11.500: France, 2400: the Irish Republic, 12.000: Kenya, 1700; the Netherlands. 14,000: New Zealand, 156.000; Norway. 1700: Poland. 16.000; South Africa. 2000; Sweden, 4600; others. 3400.

New Zealand's quota of 156.000 tons compares with 156.214 tons sent to Britain in 1961 and an average of 155.873 tons annually over the last five years, according to the New Zealand Press Association’s special correspondent in London. There is no doubt that had the Board of Trade not imposed quotas for another year the British market would have been flooded with butter.

Estimated supplies given to G.A.T.T. at the January meeting are believed to have been about 480,000 tons and

the price would have slumped from New Zealand’s present price of 285 s a cwt to the lower 200 s mark.

But with supplies pegged at 390,000 tons for the 12 months, compared with 423.000 tons imported by Britain in 1961, there will be 33,000 tons less on the market Rise in Price? Initial forecasts are that New Zealand butter should hold its price at 285 s—and there might be a tendency to a slow rise This is the first time that New Zealand has accepted a quota. In doing so, New Zealand has waived her right of free entry for one year. It was a “bargain” the British Government felt obliged to negotiate with New Zealand because her decision to impose controls is contrary to G.A.T.T. Britain also felt she could not discriminate against other supplying countries in New Zealand’s sole favour. Her decision will probably cause complications with EEC. countries with which Britain is now negotiating for entry into the European Common Market. The British Government is taking the risk of criticism by British housewives for keeping the price of butter higher rather than allowing it to go a good deal lower.

The vital point for New Zealand, of course, is the waiving temporarily of her right of unrestricted free entry. Questions being asked include: Does' this mean the thin end of the wedge and will New Zealand be expected to waive the right for the remaining four years of the 1959 agreement? Does it mean the British Government now hopes to influence New Zealand to waive the right of unrestricted free entry for her lamb and mutton exports? They are no doubt questions which are figuring in British-New Zealand discussions on the European Common Market. It could be argued that New Zealand is wrong to give up the right of free entry at a time when the general trend is towards the regulation of trade in foodstuffs, most of which are being over-produced. On the other hand it could be argued that New Zealand had no opition but to agree to a quid pro quo by waiving her rights on butter in exchange for Britain keeping the price firm by imposing controls.