Adjustments Of Mutual Benefit Could Be Made

Press, Volume CIX, Issue 32315, 5 June 1970, Page 6

Adjustments Of Mutual Benefit Could Be Made

If the will existed in the E.E.C., says the report of the Monetary and Economic Council adjustments could be made in an enlarged Cdm m on Market to safeguard New Zealand’s trade in dairy products and meat in a transitional period, and also to allow for the continuation and growth of that trade in the future.

“It would be contrary to the mutual political and economic interests of the European Economic Community, Britain, and New Zealand, for the most efficient dairy industry in the world to be destroyed because of the unwillingness of an enlarged E.E.C. to make marginal changes in some elements of its agricultural policy,” says the council.

“It is widely recognised in Europe that adjustments to agricultural policies are necessary in Europe’s own interests, to remove existing tendencies to create large surpluses of certain commodities at heavy costs to European consumers and taxpayers.” In spite of new developments in New Zealand’s economic pattern, and some success in diversifying exports and export markets, exports of butter, cheese, and lamb to Britain continue to have a basic role in the structure of the economy.

No Alternative “Over the next tpn years the relative importance of pastoral exports is expected to decline because of the faster rate of growth of other export products. However, the proportion of export income which they are expected to earn will still be the dominant part of New Zealand’s external trade,” says the council. “Indeed, over 50 per cent of the required increase in export receipts in the next

decade must come from exports of pastoral products. While there might be an increasing orientation towards Pacific trade, the link with Britain as a market for temperate foodstuffs must be maintained if the continued viability of an important section of the pastoral industry is to be assured. “At present there is simply no alternative in sight which could make such effective productive use of the resources deployed in New Zealand’s pastoral industries. “For the E.E.C. the problem of agriculture is one of the most difficult to be solved in the creation of an enlarged community. There are large divergences between the agricultural patterns in Britain and Europe. “Government policies are based on different principles, price levels diverge markedly for most products, the social basis of farming in Europe is quite different from that in Britain, and the average level of self-sufficiency in

agricultural commodities is much lower in the United Kingdom. Over-production “In the E.E.C. the integration of European agriculture by means of the common agricultural policy has created at this juncture a critical situation of over-pro-duction of a range of important commodities, including wheat, sugar, butter, and other milk products. This is a problem which the E.E.C. will haye to solve even if Britain does not become a member of the Community. “To regard an expanded community as an outlet for the surplus milk production at the expense of the British consumer and the New Zealand economy would not only, in our view, be manifestly unjust; it would also be contrary to the provisions of the Treaty of Rome both for agriculture and for international trade and in violation of the principles on which the free world has attempted to base the organi-

isation of the world economy in the post-war era. “The agricultural provisions of the Treaty of Rome, although mentioning the delivery of supplies to consumers at reasonable prices, I make no particular reference to policy on international trade in agricultural products. “On commercial policy in general, however, the treaty states that ‘by establishing a customs union between themselves Member States aim to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and the lowering of customs barriers.’ “While the Community has in practice adhered to this statement of its aims in the field of trade in industrial products, it has followed restrictive policies and policies of self-sufficiency on trade in several agricultural products. Protectionism Discussing problems of world agricultural protectionism, the council says: “The world situation in the major consuming countries, particularly for dairy products, but also to a lesser extent for meat, is characterised by pricing policies which restrain demand, stimulate output, and require trade barriers to support the artificially high price levels. Apart from the United Kingdom the main sizable markets for meat and dairy products exist in industrial countries which are committed to the maintenance of high domestic price support systems. “World trade has been disrupted through the accumulation of surplus stocks which have been disposed of by dumping on the export markets of the world,” says the council.

“The most complete system of agricultural protectionism is that in force in the E.E.C. However, protective barriers restrict access to other important markets which would otherwise offer considerable potential for expanding sales of New Zealand products."