N.Z., Aust. Refuse To Drop Preferences

Press, Volume CII, Issue 30126, 9 May 1963, Page 15

N.Z., Aust. Refuse To Drop Preferences

IN.Z. Press Association—Copyright)

LONDON, May 8.

Australian and New Zealand trade ministers now in London had refused to give up their Commonwealth butter preferences in talks with British Ministers, the “Daily Herald” said today. <

The newspaper’s Commonwealth correspondent, Michael Lake, said that Australian and New Zealand intransigence threatened British plans to wipe out all industrial customs duties in the European Free Trade Association.

Britain had asked Australia and New Zealand to give up their long-standing butter import preferences. Australia and New Zealand had insisted on heavy compensation in the way of guarantee* in the British market. “But suddenly, yesterday

afternoon, British negotiators, led by Mr Christopher Soames, the Minister of Agriculture, dug their toes in. He told the Australians and New Zealanders that the compensation was too much,” MrLake said. “So Mr John Marshall, the New Zealand Trade Minister, and Mr John McEwen, his Australian counterpart, refused to give up their

preferences.” No other London newspapers carried a similar report, though there were suggestions that current trade talks between Britain and the two Commonwealth countries were not going entirely smoothly.

“The Times” commented that judging from the sparse communique issued by the Board of Trade last night on the McEwen-Enroll talks it appeared that the Australians, like the New Zealand-

ers, appeared to be inflexible —at least for the time being. Tffie contents of the communique hardly suggested that much ground was being

yielded on “the vexed butter question.” “The Times" said

British reply had been sent to Wellington, where it is now being considered. While he would make no comment on the conditions at issue between Britain and New Zealand on the Danes insistence that the British tariff of 15 shillings cwt on foreign butte, should be waived, Mr Marshall gave a press conference New Zealand’s view on why she wanz the preference maintained. Mr Marshall held the press conference a few hours after arriving in London and shortly before seeing Mr Soames.

The London correspondent of the New Zealand Press Association reports that Britain has not accepted the conditions sought by New Zealand in return for agreeing to Denmark and other foreign suppliers of butter to the British market being allowed to forgo payment of a tariff of 15s per cwt. The

“New’Zealand regards the free access to the British market she enjoys for butter a* one of the most valuable trading rights she bat," he said. “Consequently she would regard the removal or suspension of the tariff on butter as a significant change in her preference.

“She regards it as Significant for the reason that Denmark is her chief competitor in this market and suspension of the duty would strengthen the Danes' competitive position. While quotas test it would mean Denmark could not bring m more butter.”

New Zealand ateo felt that the greater return Danish farmers would get by not having to pay the duty would also give them a greater incentive to increase production.

Increased production could mean great pressure for a bigger quota into the British market, and it could create a further contribution to Mie surplus now being disposed of in a highly competitive way in the few markets still available, he said.

For those reasons, Mr Marshall said New Zealand would need substantial compensation if the tariff were removed.