Direction Of N.Z. Trading Policies

Press, Volume CII, Issue 30153, 10 June 1963, Page 12

Direction Of N.Z. Trading Policies

in a world in which politics seemed to be overwhelming economics, said Professor B. P. Philpott, professor of agricultural economics at Lincoln College, New Zealand could either fight for free trade in agriculture or, under protest of free trade principles being violated, accept the fact of overseas developments towards quotas. But New Zealand must bend all efforts towards making sure that quotas worked as much in this country’s favour as possible. Professor Philpott was speaking at a meeting of Darfield Federated Farmers and the Darfield Young Farmers’ Club.

It was in the latter direction that it seemed New Zealand should be and was in fact moving, he said. New Zealand had accepted quotas on the imports of dairy produce into the United Kingdom She had forgone tariff preference over Denmark in return tor certain guarantees on the level of quotas. This was a good bargain, he said Preferences in the short run meant little to the price, which was determined by supplies in the United Kingdom and these would not alter with the quota system. On a long run basis preferences could be valuable, but in 1967 or sooner if Britain joined the European Economic Community they would be lost anyway. U.K. Lamb Imports Referring to proposed quotas on United Kingdom lamb imports. Professor Philpott said that there was no question yet of what the level of quotas should be. but there w r as a suggestion that New Zealand’s quota would not be less than its present exports If this w’as so it was unlikely that there would be much reduction in supplies on the British market and not much chance of a rise in the British price from which New Zealand could benefit, because there was no-one else on whom to impose quotas—that was unless restrictions were placed on beef which had an effect on lamb prices. For this reason Britain could not hope to reduce lar.ib subsidies. It could only hope

to hold them at the present level.

• On the basis of being-pre-pared to accept quotas, but under the best possible arrangements, Professor Philpott said, New Zealand should be prepared to negotiate quotas provided—and it was a very big proviso—that this country was guaranteed all the growth in demand for lamb in the United Kingdom With the population rising, this could be 1 to 2 per cent, a year.

This meant that United Kingdom subsidies would have to be reduced or British lamb production would increase and lower the price to New Zealand, or perhaps subsidies might be held at the present level in the hope thai if Home output did rise the spread of the same subsidies >ver greater numbers would deter further expansion. To be clear about the best arrangements, a great deal more needed to be known about the reaction of the United Kingdom producer to lower prices and this was at present being studied at Lincoln.

As a quid pro quo, he said. New Zealand should promise progressive equivalent reduction in import controls on British good;. “This would be good economic logic—the movement of both economies towards a sensible relationship whereas United Kingdom subsidies were leading to the need for import controls in New Zealand,” said Professor Philpott.

“It is up to us to suggest constructive ideas on quotas, rather than just opposing them root and branch.” ,