PROPOSAL BY E.E.C. Five-year transition period for U.K.

Press, Volume CX, Issue 32459, 20 November 1970, Page 1

PROPOSAL BY E.E.C. Five-year transition period for U.K.

• (N.Z.P.A.-Reuter— Copyright? BRUSSELS, November 19,

A compromise plan offering Britain five years grace to adjust to Common Market rules and a choice of two methods of budget contributions during the transition period has been proposed by the E.E.C. Executive Commission.

The Commission has also proposed the gradual reduction of New Zealand butter exports by up to 50 per cent during the transition period.

The proposals, contained in a secret document approved by the Community’s civil service in Strasbourg, France, yesterday, represented an alternative to overcome a major stumbling block in British entry negotiations, sources said in Brussels.

The proposals will be put initially to the Six before being presented to Britain as the Community’s negotiating position.

The Commission said Britain could contribute £3sBm ($767m) to the E.E.C. budget in 1973 —the start of a fiveyear transition period. It suggested that Britain could start easing into the Common Market’s complex financial framework over five years by paying 21.5 per cent of the $3570m budget of an enlarged 10-nation Community.

But because Britain would collect money from the budget, its net contribution would be below the £3sBm figure, observers said. Simplest solution The Commission considered this the simplest solution, but offered a more flexible arrangement which would mean Britain paying between 10 to 15 per cent of the budget in 1973, increasing each year to 20 to 25 per cent in 1977. As expected, the Commission, suggested the British economy be adjusted to E.E.C. membership over five years from January 1, 1973. The Commission recommended that New Zealand butter exports to an enlarged Community should not be diminished by more than 50 per cent on the present total export to the British market in a transition period of five years, an N.Z.P.A. staff edrrespondent reported.

Any drop in New Zealand’s export quantity should be compensated for by progressively higher prices, the Commission said.

On the question of a continuing special arrangement for New Zealand beyond a transition period, the Commission

recommended that action should be taken to try to improve conditions of the world dairy produce market in the intervening five years. If this was unsuccessful, the enlarged E.E.C. should then examine the situation and decide what measures should be taken. Cheese question On the question of cheese, the Commission recommended that all quantitative guarantees should end at the same time as the transition period. The commission also recognised that a special arrangement should last for a longer time than the transition period.

Because it is unlikely that any world commodity agreement will be forthcoming in the near future it would seem that New Zealand will have at least a 50 per cent quantity guarantee for an indefinite period.

The commission also set 50 per cent as the minimum figure: it does not rule out a higher figure. It does not accept the British idea of setting New Zealand’s minimum figure in metric tons of milk, which would have given a flexibility to suit the market.

New Zealand’s Deputy Prime Minister (Mr Marshall) said in Brussels today that he was confident that the final position on a special arrangement for New Zealand would be nearer the British paper than that of the E.E.C. Commission.

However; the Commission document provided a reasonable starting point for negotiations, he said. “It should be understood that this report, which we knew the Community had been preparing, must first be considered by the Council of Ministers and only after it has been adopted by them does it become the negotiating position of the Six.

“It then becomes the opening position for the E.E.C. in contradistinction to the opening position of the British Government, which has already been announced—namely the continuity of our present basic trade in the milk equivalents of butter and cheese. Confident “In view of the way in which our discussions are developing in Europe I am confident that the final position at which the parties arrive will be nearer the British opening position than what appears from unofficial re-

ports to be that of the Commission.”

It was important to remember that the Commission paper was a proposal to Ministers of an opening negotiating position with the British Government, the Acting Minister of Overseas Trade (Mr Shelton) said in Wellington today, the Press Association reported. The Government was' still awaiting official confirmation of the paper. However, if press reports were correct, the proposals contained in the paper were far removed from what the New Zealand Government would consider a satisfactory solution. Unacceptable Proposed terms for the entry of New Zealand dairy produce to an enlarged Community were completely unacceptable, the chairman of the Dairy Board (Mr F. L. Onion) said in Hamilton today. Mr Onion said he had received no official word of the report, but if press reports were correct "it would be completely unacceptable to the New Zealand dairy industry and I presume to New Zealand as a whole.”