The Press MONDAY, FEBRUARY 25, 1963. E.F.T.A. And N.Z. Butter

Press, Volume CII, Issue 30065, 25 February 1963, Page 10

The Press MONDAY, FEBRUARY 25, 1963. E.F.T.A. And N.Z. Butter

The collapse of the European Economic Community negotiations has naturally turned Britain's attention to the European Free Trade

Association to see what trading alternatives thia

organisation can offer. Though arranged long before the breakdown at Brussels, a Ministerial meeting of the association was opportune in providing a chance for E.F.T-A. members (the “Outer Seven” as distinct from the “Inner “Six” of the E.E.C.) to review the new situation. The E.F.TA. group (Britain, Portugal, Sweden. Norway, Denmark, Austria, and Switzerland) offers neither the present opportunities nor the potential scope of the Six. Nevertheless, it is an important sector of European trade and, working together, the Seven could exercise a strong influence. Denmark had already announced its rejection of President de Gaulle’s offer of Common Market membership, but others were doubtful about the wisdom of remaining outside the E.E.C. Four decided at the meeting not to seek links with the E.E.C., only Austria (because of its heavy trade with West Germany) feeling it must make some arrangement with the Common Market. The E.F.T.A. meeting did not concern itself merely with examining the organisation’s solidarity, and giving expression to it. the Ministers made some dramatic moves towards accelerating the dismantling of industrial tariffs within the group. If given effect, these proposals would demolish internal industrial tariffs before the Six do likewise—provided, of course, that the E.E.C.

does not accelerate its programme. The E.F.TA. proposals will not come up for decision until the next Ministerial meeting at Lisbon in May; but it is already apparent that the way for action is far from clear.

The foremost difficulty is the reluctance of Denmark, Norway, and Portgual—the least industrialised E.F.TA. countries—to agree to a further round of industrial tariff cuts without corresponding advantages for their own largely agricultural exports. This puts the problem right on New Zealand’s doorstep. The Danes have shown that by removing industrial tariffs they would give Britain better treatment than Commonwealth countries do. Therefqre, they argue, Britain should give special treatment. to Denmark’s two main exports, bacon and butter. Bacon already receives favourable treatment, and Denmark wants something similar for its butter. This can only be done at the expense of other countries—notably New Zealand, if, for instance, the Danes were granted both a bigger quota of butter on the British market and the lowering or removal of tariffs. Will Britain consider it worth while meeting Denmark’s demands in order to retain that country's allegiance to the E.F.TA? If this means breaching Commonwealth preferences and antagonising France still further, the price may be more than the E.F.TA. is worth. In the meantime, however, New Zealand is left to wonder whether its butter market has escaped the frying pan of the E.E.C. only to fall into the fire of the. E.F.TA.