Britain In E.E.C. COSTS IF N.Z. NOT GUARDED

Press, Volume CIX, Issue 32315, 5 June 1970, Page 1

Britain In E.E.C. COSTS IF N.Z. NOT GUARDED

Should Britain enter the European Economic Community without special arrangements to protect the sale of New Zealand dairy products in Britain, about 8500 New Zealand farmers and 2000 farm workers and their families would have to find new work.

The Monetary and Economic Council has reported to the Government the implications of an enlarged E.E.C. and has calculated that the resettlement of 10500 families would require an investment of sl3om. The average size of holdings that are now dairy farms would have to be increased by one third and the output of dairy produce reduced by about 55 per cent.

In addition, there i would be the cost of re-1 training displaced per-; sons and another $BO ' million would be needed to convert vacated and merged farms to alternative production mainly beef says the council’s report. The council predicts that New Zealand will lose $B5 million a year in export earnings if dairy products are not allowed to enter an E.E.C. including Britain. It “optimistically” assumes that the prices of other New Zealand exports will remain buoyant and that New Zea-

land will continue to be able ito sell lamb in Britain and • Europe. Three Ways Even if New Zealand were allowed time to adjust its farming industry to a loss of dairy exports, the economy of this country would be damaged in three important ways, says the council. These are:

(2) New Zealand’s capacity to import would be reduced by more than $B5 million even after adjustments had been made to farm production and by much more than $B5 million if prices fell with the increase in beef and lamb production.

(3) The loss of foreign exchange earnings would seriously impede the development of manufacturing industries in NewZealand by creating difficulties in the supply of materials and fuels.

The report was commissioned by the Government and is published today within weeks of the beginning of talks in Brussels on Britain's joining the E.E.C. If there is a change of Government in Britain after the General Election there on June 18 these talks will probably be postponed. For the benefit of European readers of the reportant the report is to be distributed in ti nslation—the council notes that for Britain the equivalent of an $B5 million annual loss of export earnings by New Zealand woulc be about £6OO million a year. “For an enlarged E.E.C. including Britain, an equivalent permanent loss would be BUSBOOO million,” says the council.

The 80-page report was prepared by the council’s chairman (Professor F. W. Holmes), its two members (Mr B. E. Rudman and Mr A H. Ward), and secretariat in consultation with the Treasury and a number of commercial organisations, the producer boards, and individual specialist authorities. U.K. Circulation The report is being widely circulated in Britain, according to the N.Z.P.A. correspondent in London. Officials at the New Zealand High Commission yesterday began sending copies out to Whitehall, Westminster, Fleet Street newspaper offices, businessmen and economists with an interest in Britain’s bid. Whitehall sources said it was too early yet for any official reaction. “About all you could say is that we’re finding the document quite interesting,” one official said. The New Zealand team of officials which will discuss with Whitehall the approach that will be taken by Britain to the. New Zealand issue tn the entry negotiations will begin talks on Monday. Extracts and summaries from the report are printed in today’s farm pages and on page 6.

(1) Much capital that would have been used to increase output would have to be diverted to extend less efficient forms of production, or consumption would have to be restrained to free resources for this investment