Sentiment not enough to keep N.Z. trade

Press, 9 May 1979, Page 22

Sentiment not enough to keep N.Z. trade

By

STUART McMILLAN

Perhaps because sentiment is often considered to be an attribute of the conservative mind, New Zealanders feel safer when a Conservative Government is in power in Britain. The attachment to the Commonwealth seems to carry with it an assurance that Britain will look after New Zealand. While the Conservatives would not, in so many words, go out of their way to destroy such a vision, the future of New Zealand’s exports of its all-too-solid butter, cheese, and meat cannot rest on such foundations. Even sentiment can itself be calculated. A Conservative made a cool political judgment on the question for me when I was in Britain in February. He argued that sentiment — family ties, war memories, and so on — and a feeling that New Zealand should not be hurt badly because of Britain’s joining the European Economic Community, were the main political factors the Conservatives had to ' take account of in their relationship with New Zealand. But, he said, the sentiment was not as strong as it had been, and many British people had visited or otherwise learned about New Zealand and come to the conclusion that, on the whole, New Zealanders lived quite well. Therefore Conservative politicians need not take quite as much account of New Zealand as they once did.

He might have found further support for his view in the fact that although New Zealand was cited at both the Labour Party opening

campaign address and at the Conservative one, neither New Zealand nor the E.E.C. became debating points. The Conservatives tend to put New Zealand in the context of the Commonwealth and their loyalty to it. Labour would put New Zealand there too, but the supply of cheaper New Zealand food has had a significant importance to Labour Party food policy. Labour looks for many of its supporters among those to whom the prices of food matter greatly. New Zealand was thus more an integral part of Labour’s relationship with the British people than it is likely to be under the Conservatives. Other factors also suggest that New Zealand will find it more difficult to preserve its trade with a Britain under Conservative rule than it has during Labour’s term. The Conservative Party is the traditional farmers’ party in Britain. Producer interests are likely to receive greater emphasis than under Labour. Mr Peter Walker, the new Minister of Agriculture, himself a farmer, seems much more likely to give prominence to the agriculture part of his portfolios than to the food, which his predecessor, Mr John Silkin emphasised. Not that Mr Silkin neglected farmers. Among other things, the Ministry of Agriculture brought out a White Paper of British farming in February this year

called “Farming and the Nation.” This pointed to expansion of British agricultural production in all fields.

The intention was to save on imports.

Mr Walker may be expected to implement the policies put forward in the White Paper with considerable vigour. New Zealand was unlikely, under the White Paper policies, to be able to expand its exports of dairy produce or meat to Britain. What New Zealand may face under the Conservatives is a more rapid decline. That will depend, to some extent, on how Britain’s relationship with the rest of the E.E.C. develops. Mr Walker has already criticised Mr Silkin and obviously believes that Britain will have to show itself a good European country to appease the other members. But Britain is caught. Already it is the biggest (or second biggest depending on how you calculate it) contributor to the Community Budget. That hurts the British public. The Conservatives will therefore work, as did Labour, for a reform of the Common Agricultural Policy, which absorbs about 75 per cent of the Community Budget. So how will the Conservatives demonstrate their willingness to be good E.E.C. members and still be pushing exactly the same views as Mr Silkin, whose methods they deplored so openly? One way to resolve this dilemma would be to be less insistent on as much access as possible for New Zealand produce into the Community. One Conservative, in fact, told me that a Conservative

Government would fight tor New Zealand to the best of its ability, but if the choice had to be made between Europe and New Zealand, Europe would take precedence. In the short term New Zealand is not likely to be faced with severely-reduced access. The argument going on now concerning New Zealand is how much butter will be allowed in after 1980. New Zealand wants a fixed quota; one counter argument has been that it should be given a share of the British market. Since the British market is declining, this means that New Zealand would be able

to export less and less. What the Conservatives might do is fight a little less hard in the Council of Agriculture Ministers, or before the decisiori gets to that level, over New Zealand access. Similarly, if the question of a sheepmeat policy is raised again (at the moment it is held in abeyance pending the outcome of a European Court case) Britain might look less hard at how the implementation of the policy would affect New Zealand. At the moment the E.E.C. is only 64 per cent self-sufficient in sheepmeats, but pricing policies could affect all that. New Zealand

has to be aware of every nuance. Under Labour, Britain was patient; the extent to which the Conservatives will be patient has yet to be determined. Another aspect of Conservative policies might affect New Zealand adversely. The Conservatives aim to reduce income tax and to recoup some of the loss by taxing spending more highly. This will have the effect of increasing prices and whether food prices are directly affected or not, they are bound to be so indirectly. Britain is thus likely to become more quickly conditioned to the high food prices of the rest of the Community. These work against New Zealand which can produce food more cheaply. A political aspect might also prove tricky. Throughout the campaign, the "Economist” magazine argued that a Labour defeat might strengthen the hands of those in the Labour Party who would like to see Britain leave the Community. It said that Labour was a more responsible Government than Opposition, and the party might become committed to withdrawal while in Opposition. No doubt if such debates occur within the Labour Party in Britain, there will be a danger that New Zealand will become deeply embroiled in the question and be identified with Labour. The Conservatives would then be putting New Zealand down with Labour. But such a situation can be avoided. It is for matters like that we pay diplomats.