AGREEMENT TO END BUTTER DUTY

Press, Volume CII, Issue 30129, 13 May 1963, Page 14

AGREEMENT TO END BUTTER DUTY

Government Satisfied With Quota Promise (New Zealand Press Association) WELLINGTON, May 12. The Prime Minister (Mr Holyoake) announced tonight that, after some weeks of discussions with the British Government and in consultation with the New Zealand dairy industry, the New Zealand Government had agreed to waive its rights under the United Kingdom and New Zealand trade agreement so that the British tariff on butter of 15/- per cwt. could be suspended while the present quota system continues.

Mr Holyoake said the New Zealand Government welcomed the assurance of the British Government that it had no intention of removing the import restrictions on butter “so long as the circumstances on account of which they were imposed remain.” The system of import regulation of supplies of butter which was introduced two years ago to protect the New Zealand butter rparket in Britain against dumping had operated to the dairy industry’s benefit, he said. In the light of the British Government’s assurances that the tariff on butter of 15/- per cwt. should be suspended while the quota system continued, the New Zealand Government therefore felt able to agree, he said.

Since the volume of supplies to Britain is now controlled by import regulations. and not by the normal operation of a free market, the duty preference was not so significant, said the Prime Minister.

The British Government had asked for New Zealand agreement and that of other Commonwealth suppliers to the suspension of the tariff applied to non-Common-wealth suppliers. This was to . obtain the concurrence of E.F.T.A. members with agricultural export interests to an acceleration in the programme of industrial tariff reductions under the European Free Trade Association arrangements. The agreement now reached with Britain provides for the continuation of effective action ‘against dumped and subsidised imports from third countries into the British butter market on the basis of antidumping provisions of the United Kingdom-New Zealand trade agreement. The value of this agreement had been demonstrated by the trend of the market since the quota system was introduced, said Mr Holyoake.

The price of New Zealand butter on the United Kingdom market had risen during this period from 250 s to 315 s per cwt. New Zealand would continue to be able to supply not less than its present share of total permitted imports of 410.000 tons a year and a quantity not less than that allowed under the existing quota scheme; namely, 163.800 tons annually. The arrangements now made by the British Government in consideration of the waiver by the New Zealand Government should give a greater measure of assurance to the dairy industry in the British butter market, the Prime Minister said.

The duty preference in operation since 1932 has meant that butter from Commonwealth countries, including New Zealand, enters Britain free of duty while supplies from foreign countries pay a duty of 15s per cwt. The suspension of the tariff means that non-Common-wealth suppliers of butter to the United Kingdom, including Denmark, will no longer pay any tariff on their exports to Britain so long as the quota system lasts.