Cautious view of E.E.C. dairy deal

Press, Volume CXV, Issue 33791, 13 March 1975, Page 2

Cautious view of E.E.C. dairy deal

(Prom

DAVID BARBER,

N.Z.P.A. staff correspondent.)

DUBLIN, March 12.

The Minister of Overseas Trade (Mr Walding) and New Zealand’s ambassadors to the Common Market Nations will meet today in London to analyse the E.E.C. summit’s statement on future dairy exports to Britain.

Their initial reaction is likely to be cautious, despite the claim last night by the British Prime Minister (Mr Wilson) that the Dublin summit had produced satisfactory long-term arrangements for New Zealand trade. The E.E.C. statement issued last night is very carefully worded — and clearly a lot of work must be done before New Zealand can be certain of continued protected access to the British market in the years ahead. The Leader of the Opposition (Mr Muldoon), who is also in London, said last night, after talking to Mr Walding, “At this stage there is no firm assurance that New Zealand is getting a better deal.” Pressure off But both Mr Walding and Mr Muldoon agreed that the statement by the nine heads of government left scope for better arrangements. Everything depends on the E.E.C. Commission in Brussels, which has been asked to draw up detailed proposals “as soon as practicable” for New Zealand’s dairy trade with Britain after 1977, when existing arrangements end. The danger is that this is unlikely to be before the British referendum on continued Market membership in June. With Britain’s bid to renegotiate its entry terms concluded at Dublin, and with the referendum over, the Community will not be under the same pressure to help New Zealand. Nevertheless, the statement probably went as far as New Zealand could expect, given the nature of the summit and its attention to Britain’s controversial — and

with its Market colleagues, unpopular — renegotiation demands. Main gain The biggest gain was undoubtedly the agreement by the heads of government periodically to review the prices New Zealand gets for its dairy exports to Britain. The nine leaders agreed that New Zealand’s prices would be adjusted “as necessary” having regard to prices paid to the Common Market’s own fanners and rising freight and production costs in New Zealand. But they also talked of taking into account “supply and demand developments in the major producing and consuming countries of the world,” leaving the way open for a negative attitude in times of Community surpluses. Price factor New Zealand — and Mr Wilson — have always criticised pricing provisions of the original Luxemburg agreement. These pegged New Zealand returns to the average of the years 1969-1972, and even with an 18 per cent increase from last January 1, New Zealand still receives only 46 per cent of the E.E.C.’s own intervention price for every ton of butter it ships to Britain. Referring to quotas after 1977, the Government heads said these should “not deprive New Zealand of outlets which are essential for it.” The statement continued: "Thus for the period up to 1980, these annual quantities depending upon future market developments, could remain close to effective deliveries under protocol 18 in 1974 and the quantities envisaged by New Zealand for 1975.” On the basis of 1974 shipments, New Zealand can expect a butter quota of about 120,000 tons annually between 1978-1980. This is a fall of 16,000 tons on the quota for 1977. Vital phrase The New Zealand Government will particularly want to examine the qualifying phrase “depending upon future market developments.” As well, the original draft proposal discussed yesterday began “thus for the end of the next period up to 1980,” the word “next” implying a continuing arrangement into the ’eighties. This was dropped in the final version. Mr Wilson told a press conference last night that he had no doubt the agreement reached meant there would be a continuing arrangement beyond 1980, but the statement does not say that. “When the time comes we will again press very strongly,” he said. “I have no reason at all to think that it would be rejected.” The question of protected access for New Zealand cheese after 1977, which pre-

vented agreement on Monday night, was solved with a peculiar compromise. The leaders noted that protocol 18 makes no provision for cheese quotas beyond 1977, but added: “This situation and the problems which may arise from it will be given due attention with appropriate urgency.” Asked to explain this, Mr Wilson said: “The options are open. The option of cheese — or no cheese.” Clearly, New Zealand has no guarantee of cheese exports extending beyond the 1977 cut-off point. The British Prime Minister’s reply was taken by some observers as confirming that New Zealand cheese was a “phoney” issue at the summit, especially as New Zealand had shipped only 16,000 tons of its 60,000-ton quota to Britain in 1974. Concession point It seemed clear that having already cultivated other markets, and prepared itself to lose cheese sales to Britain after 1977, this was the easiest point for New Zealand to concede. Mr Wilson saw it otherwise, though . his colleagues were adamant that they would not change the protocol and have specifically ruled out cheese from this year’s review of post-1977 arrangements. But the heads of government made it clear that they want “ever closer co-opera-tion” between the Common Market’s Brussels headquarters and New Zealand, noting that between them they provided the biggest part of world dairy exports. The objective, they said, was to promote in their mutual interest an orderly working of world markets. “Such a co-operation, apart from its intrinsic value, should provide a basis from which to achieve, in a wider framework, the conclusion of an effective world agreement such as is envisaged in protocol 18,” the statement added. The protocol includes the Community’s undertakings to seek an international agreement on milk products and to follow a commercial policy that does not frustrate New Zealand’s diversification efforts. Enough time? The main question for the New Zealand Government is whether it can endorse any new arrangements before the British referendum. Mr Wilson wants this endorsement because he sees it as important in helping to get the “stay in” he clearly favours. But it is hard to see how Mr Rowling can endorse this statement unless it is followed by firm detailed arrangements from the commission in Brussels. Mr Wilson said last night it was not essential to have the review before the British vote, but added: “I realise that it’s a matter urgently awaited in New Zealand.”