Strategies to help our exports

Press, 17 February 1978, Page 12

Strategies to help our exports

An opportune conference was convened this week at Massey University to examine the prospects of increasing exports from Australia and New Zealand to the wealthy industrialised countries in the Northern Hemisphere. Bv concentrating on medium-term strategies, the seminar served as a welcome reminder that, present difficulties notwithstanding. New Zealand’s prospects as a low-cost producer of farm produce are still encouraging. Japan’s consumption of milk products, to take one instance, is expected to rise from 5.7 million tonnes in 1972 to 8.1 million tonnes in 1985: and imports are predicted to rise from 0.8 million tonnes to 3 1 million tonnes. The annual consumption of sheepmeats in the European Economic Community exceeds New Zealand’s annual production. The total consumption of meat in the United States is nearly eight times the annual production of meat in Australia and New Zealand.

The E.E.C., Japan, and the United States all produce the greater part of their own food reouirements, but mostly at a cost much higher than that of imported foodstuffs They do so partly in pursuance of the goal of national selfsufficiency and partly to serve the political object of maintaining the incomes of their farmers. Realistically, the seminar made no call for the reversal of these policies, although it formally affirmed the principle of free trade in agricultural products Most of the seminar’s activities were evidently directed towards exploring the possibilities of achieving marginal increases in the imports of foodstuffs by wealthy nations

Since before World War 11. Japan has followed a policy of self-sufficiency in food production. In spite of the increasingly frequent warnings of agriculturists and economists of the high cost, if not the physical impossibility, of feeding Japan’s 115 million people on the produce from an area no larger than New Zealand, trade negotiators still must pay lip service to the goal of selfsufficiency.

The most that can be expected of any Japanese politician or bureaucrat at this stage is an admission that 100 per cent self-sufficiency in all food products is not feasible, and that some lesser tarset —perhaps 70 or 80 per cen t —is now more reasonable. Australia and New Zealand might then, having secured this acknowledgement, negotiate for small, but growing, proportions of the Japanese market

The United States market already provides a comparatively stable outlet for significant quantities of beef from Australia and New Zealand. Unlike the market in Japan, where a huge profit on food imports either lines the pockets of importers or helps indirectly to subsidise Japanese farmers, the United States market has always paid world prices for its imports. Negotiating with the United States entails a careful study of that country’s system of protecting its farmers from low-cost imports; the rise of consumerism in the United States holds out some hope that the political system will pay more heed in future to the interests of consumers who want low-cost imports. The United States Government will be all the more responsive to these interests if other countries, such as Japan, become less protectionist against American exports. The E.E.C.’s notorious Common Agricultural Policy, emphasising the maintenance of incomes of peasants, is the principal barrier to increased E.E.C. imports The system is so costly, and food prices in the E.E.C. are so high, that it must surely break down or at least be substantially modified before many years have passed.

In the meantime, however, New Zealand dairy producers are fighting desperately to retain their dwindling share of that market. Dairy Board and Government officials engaged in the continuing negotiations with the E.E.C. might well regard the contemplation of medium-term prospects as an academic exercise, or at least as an exercise of lower priority than retaining as much as possible of the dwindling E.E.C. cheese quota. The seminar at Massey University will have served a useful purpose if it prompts further research into more long-term arrangements with the E.E.C.

The triple sponsorship of the seminar by an English trade policy research centre, an Australian foundation, and by the university itself is unusual in New Zealand. It encourages the hope that more research of this nature into questions of great significance for New Zealand will in future be undertaken in co-operation with overseas organisations. In particular, the prominent part played in this seminar by Australian participants is encouraging. Too often Australia and New Zealand have approached common problems seeking individual advantage rather than acknowledging that they have more to gain than to lose by close co-operation .