The Press SATURDAY, JULY 16, 1966. Assurance For Exports

Press, Volume CVI, Issue 31113, 16 July 1966, Page 14

The Press SATURDAY, JULY 16, 1966. Assurance For Exports

The trade agreement with the United Kingdom, on which the Minister of Overseas Trade (Mr Marshall) has elaborated, secures New Zealand’s trading position with Britain in almost every respect for the next six years; in some circumstances New Zealand would be better off than under existing agreements; it is difficult to foresee any circumstance in which the Dominion would be worse off as a result of the agreement. Most notable of the changes is the surrender of the percentage of British butter imports which New Zealand is now guaranteed under the butter quota system. Britain now guarantees access to 164,000 tons of New Zealand butter each year, or, if the amount would be greater, to allot 40 per cent of its total butter quotas to New Zealand. From the beginning of the next quota year, April 1, 1967, New Zealand will have a higher absolute quota of 170,000 tons and the right to a “ reasonable ” share of any increase in imports. The new fixed quota is very slightly less than the amount of butter New Zealand is at present supplying to Britain. The assurance that New Zealand will be able to continue to sell this major part of its butter output in Britain until at least 1972 is a major achievement. New Zealand will continue to negotiate with Britain over the annual quota of butter imports from all sources. Although New Zealand can expect a “reasonable “ share ’’ of any increased sales of butter the assurance that Britain has no intention of abandoning the quota system or of encouraging the expansion of domestic milk production for butter manufacture, and Britain’s acknowledgement of the damaging effects of unremunerative butter prices will be welcomed by the New Zealand dairy industry. Although New Zealand will continue to have the opportunity to share in the supply of butter in excess of the basic quota and will be consulted on any proposed additions to imports, substantial increases above New Zealand’s 170,000 tons or in the total butter imports in the next five or six years are not likely to be welcomed by New Zealand. During this period any substantial quota increase would depress the market price. Difficulties in agreeing on the annual quota will continue to involve a balance of interests between Britain’s cheap-food policy and New Zealand’s aim to obtain a quota which will produce a remunerative price for butter. Nevertheless, the assured quota for New Zealand until 1972 is an important gain.

Mr Marshall’s negotiations have produced for New Zealand a very fair arrangement on preference tariffs and duty-free imports of British goods. Certain items that are now duty-free will remain so until at least January 1, 1970; and the range of duty-free items has been slightly extended. Hitherto, these concessions under the 1959 trade agreement could be terminated at six months’ notice. Guaranteed margins of preference will be continued and extended, although the difference between guaranteed margins and the actual present margins allows New Zealand room to negotiate most-favoured-nation agreements with other countries where New Zealand markets might be expanded. After January, 1970, the duty-free admissions and preferences for British goods may be terminated at six months’ notice. They will remain a bargaining point for the negotiations with Britain at the end of 1970 on the admission of New Zealand produce to Britain after 1972. If Britain joined the Common Market New Zealand would want to offer tariff concessions elsewhere. New Zealand manufacturers will suffer no adverse effects from this aspect of the agreement. New Zealand would hold its export position in Britain if Britain were to join an international commodity agreement covering any of the major items of our farm produce. The agreement provides that if Britain were no longer able to offer free access to New Zealand produce the restricted level of imports should be not less than the level over a representative period preceding the control of Imports. This would be an important protection for New Zealand, similar in effect to the butter quota. None of the arrangements under this agreement diminishes the urgency of developing alternative markets for New Zealand produce. For butter the long-term quota permits New Zealand to foresee just how much of the increased output of butter will have to be disposed of in other quarters.