Imports exempted in U.S. meat freeze

Press, Volume CXIII, Issue 33189, 31 March 1973, Page 16

Imports exempted in U.S. meat freeze

tFrom BRUCE KOHN. N.Z.P.A. staff correspondent) W ASHINGTON. March 30. The United States Government yesterday clamped a pricefreeze on domestic meat prices but exempted imported meat from control.

While holding down local beef, lamb, and pork prices to stipulated levels based on prices paid during March, it specifically permitted importers, wholesalers, and retailers to pass on higher prices they might pay in future for imported meats. Ar the same time, the White House made clear that it planned the elimination of tariffs on imported beef and lamb, and indicated that tariffs on imported cheese may be lifted. The over all effect of the meat price-freeze announced by President Nixon during a nation-wide television broadcast. is to hold out the prospect of better conditions of access for New Zealand and Australian beef and lamb while leaving open the prospect for even better returns because of American meat shortages. The moves were made without prior notification to New Zealand and Australia — the United States’ largest overseas suppliers of beef 1 and lamb — and it was evident that the Administration wanted to play down the price-control exemptions afforded imported meat.

Statements made by the Secretary of the Treasury (Mr George Schultz), the President himself, and the Secretary of Agriculture (Mr Earl Butz) contained no reference to it. Most reporters left a, briefing by the two Cabinet members before the President’s televised statement., believing the controls applied to imported meats. But in regulations issued during the evening, specific provision was included for anv person who imports and sells "meat items” from outside the United States to pass on price increases for such items on a dollar-for-doilar basis. According to a White House spokesman this morning. importers, wholesalers, and retailers may mark up their imported meats according to the scale of higher prices they may have had to pay for them, but they must not increase their profit mar- 1 gins. The increased' price would have to be justified to Government officials. Mr Shultz said that as the lifting of beef import quotas, removal of tariffs, and steps :

I taken to encourage domestic | production took effect, meat I prices would come down. The Administration ■ planned to send a bill to Con- : gress to permit the President | to suspend tariffs and quotas on items rising rapidly in ’ price, and for which demand 1 could not be satisfied at reasonable price levels. Mr Shultz specifically mentioned a beef tariff of 31 per cent, and a lamb tariff of 21 , per cent, as examples of ; those items on which the f President would take action, i The Administration had de- . liberately used the "ceiling” ; to describe its price-freeze ’ action because it expected , and hoped that meat prices i would drop below the established levels. Once overseas suppliers saw that United States meat ■ prices were at ceiling levels,! they would not hold back on l ‘■supplies in an effort to drive, market prices higher, Mr Shultz said—a hint that the Administration believed some suppliers mav have held back exports. Mr Butz told the N.Z.P.A. that the Administration; would rely on the fact that ( i importers knew returns; were limited by the price, ceiling to hold prices down. President Nixon said in his ! television speech that the; “major weak spot" in the I

Administration’s fight against inflation was in the area of meat prices. “What we need is action that will stop the rise in meat prices now,” Mr Nixon said. “That is why I today ordered the Cost-of-Living Council to impose a ceiling on prices of beef, pork, and lamb. The ceiling will remain in effect as long as is necessary to do the job. Meat prices must not go higher.” Mr Nixon said that the ceiling would help in the battle against inflation, but was not a permanent solution. Analysts believed that the Administration deliberately ignored the imported meat exemption in its explanations of the price-control programme because it feared immediate adverse reaction by American cattlemen and consumer interests. Mr Shultz asserted that a tremendous surge in demand had caused the problem of rising food prices which was “very severe.” Mr Butz, who earlier this month described advocates of price controls on farm products as “damned fools,” was asked to identify the “damned fools” in the Administration. He smiled and quipped: “It was obviously a facetious; remark about those holding• a contrary view to my own.” ;