THE PRESS THURSDAY, MAY 8, 1980. The threat to lamb

Press, 8 May 1980, Page 20

THE PRESS THURSDAY, MAY 8, 1980. The threat to lamb

.Although another trip to the European Economic Community by the Minister of Foreign Affairs (Mr Taiboys) had long been possible about this time, the sudden adoption of views by most of the member countries about sheepmeat last week has made his trip imperative. The members of the Community, apart from Britain, have moved close to the French view of a new sheepmeat regulation. It is not the introduction of the .regulation that is of major concern to New Zealand—although officially the Government is still arguing that one should not be introduced at all—but the restrictive nature of the regulation which has been proposed by the European Commission. When a draft sheepmeat regulation was proposed in March, 1978, certain, mechanisms to restrict the selling of lamb to Community members were present.'Yet it was acknowledged freely that the E.E.C. was only about 60 per cent self-sufficient in lamb. If the price of lamb dropped below a certain point then lamb would be bought in and stored. However, the draft convention says: “... . the Commission considers that buying-in by intervention agencies will not be necessary.” To avoid price fluctuations, aid was to be provided for private storage of sheepmeat when the price fell below a certain level. The present proposal is more threatening to New Zealand than that. Not only would aid for storage from intervention buying-in be given, but compensation would be paid for the fail in price, and the E.E.C. might sell the stored lamb at a lower price on third markets.

Hence New Zealand can see a familiar E.E.C. pattern of increasing prices, thereby creating a surplus which is sold to third, markets at a lower price, undercutting the price of New Zealand agricultural produce. This has not happened yet, and the British veto of the proposal makes its future uncertain. Something like that has long been the aim of the French; the difference is that seven of the other eight members of the E.E.C. seem to have been persuaded. The reason is mainly because

of the E.E.C. budget crisis. Britain argues that its contribution is too large compared with what it gets out of the; Community. The recent summit Meeting in Luxemburg failed to resolve the issue. France has been arguing that asettlement must involve sheepmeat as well as other matters. Until last week it was not clear how seriously the other members would take the French or how seriously the French were about insisting on sheepmeats.

The British are adamant that such a proposal is not acceptable. Considering the huge amount of lamb New’ Zealand sells to Britain, New Zealand must ■be truly thankful that the British have responded in that way. It can be argued that the British want the lamb—and want it reasonably cheaply—because it is a basic food in Britain, but it would be both inaccurate and churlish to consider that the British are not also considering the long and friendly relationship between Britain and New Zealand and what the loss of a substantial part of the market for lamb in Britain would mean to New Zealand. Some hundreds of millions of dollars a year in British contributions to the E.E.C. budget are also at stake and it seems inevitable that some balance between the budget contributions and Britain’s loyalty to New Zealand will be struck. Inside the E.E.C. the pressures will be strong for the budget crisis to be settled. At another time the chance that Britain would leave the E.E.C. would be greater. In the face of Soviet intervention in Afghanistan and uncertainty about the Soviet Union generally, Europe sees a need to stay united. The question is why, under those circumstances, the French should be so insistent. The most likely explanation is that the French believe that the Common Agricultural Policy is the foundation of the E.E.C. and that without it the E.E.C. would fall apart. New Zealand, unfortunately, stands a chance of being crushed in Europe’s drive for unity. The task of seeing that this does not happen is one of the most important that Mr Taiboys has undertaken.