Retaliation threatened if N.Z. devalues

Press, Volume CXIV, Issue 33579, 6 July 1974, Page 15

Retaliation threatened if N.Z. devalues

(N.Z.P.A. Staff Correspondent) WASHINGTON. The Nixon Administration is threatening retaliation against New Zealand should it devalue its currency against the American dollar.

Senior officials of the United States Agriculture Department made this clear when they announced that in the meantime the Administration did not plan to impose quotas on United States imports of beef and veal.

They emphasised that any “juggling” of currency values by the New Zealand and Australian Governments as “an export expansion toll” would not be well received by the Nixon Government.

Their warning was given against a background of strong speculation within international monetary circles that the two “Down Under” nations might devalue because of economic factors. In- effect the Administration appeared to be saying: “We’ve heard you may devalue, but we want to warn that if you do you won’t benefit on our beef and veal market.” LOSS TO N.Z.

New Zealand farmers are losing about 25 per cent by selling on the American market in comparison with the New Zealand, market, because of the disparity in the value of the New Zealand and American dollars. The New Zealand dollar was yesterday quoted by the “Wall Street Journal” at 1.4650 against the American dollar. The Australian dollar was quoted at 1.4925 to SUSI.OO. Devco — the offshoot company of the New Zealand Meat Board which is responsible for the salef of lamb on the American market — is complaining bitterly about the effect of the high value of the New Zealand dollar on the value of

its sales in the United States.

The warning, issued during a press conference by Mr Phil Campbell, Acting Secretary of Agriculture, and Mr Richard Bell, Deputy Assistant Secretary of Agriculture, underlined the continuing problem the Administration is having in dealing with strong pressures from the United States farming community for action to limit beef imports. “NO JUGGLING” State Department officials dealing with New Zealand and Australian affairs this morning knew little of the statements. Nor, it appeared, had the warning been cleared with the White House trade office. But Mr Campbell stated firmly that his department’s estimate that the United States would import 1210 m lb of beef and veal this year was based on “the belief that shipping nations will not juggle the value of their currencies as an export expansion tool.” Agriculture Department officials have begun daily monitoring of the flow of beef and veal imports into the United States. New Zealand supplies the United States with monthly returns estimating the quantity of meat being shipped.

AIM AT JAPAN Plans are also being made within the American beef industry for an assault on the Japanese beef market. Agriculture Department officials believe the Japanese will open their beef market for increased supplies next September, after closing it in the wake of the international oil supply crisis. The Australian Government, aware of the intention of the American beef exporters, is said within Administration circles to have told Mr Bell during his visit

there last month that Australia might consider voluntarily limiting its exports to the United States if America holds its beef exports to Japan to present levels.

United States officials described the Australian request as “bloody cheeky” — America has only a 10 per

cent share of the Japanese beef import market. Most imported Japanese beef comes from Australia. Japanese domestic beef production is up 23 per cent and it is estimated that imports this year will total 112 m lb, compared with 284.5 m lb last year.