No crisis for N.Z. —Mr Gundelach

Press, 17 July 1980, Page 9

No crisis for N.Z. —Mr Gundelach

PA- •’ . . • Auckland The Common Market Farm ■ Commissioner, Mr. Finn Olav Gundelach, is convinced that New Zealand does not face any crisis over future lamb sales to British or other markets. . “But there are a nuntber of practical , things to be worked out between New Zealand and the European Economic Community,” he said.

A slim, articulate Dane who has a key.role in the giant E.E.C. trading bloc, Mr Gundelach described his approach to talks with members of the NewZealand Government as “more than conciliatory.”

“I do not see any reason,” he said, “why we should not settle these issues in a manner that is satisfactory to both parties.

“New Zealand is wrong in believing that we are adopting a sheepmeats regime which will harm sales of New Zealand lamb in Britain or elsewhere.” Mr Gundelach said New Zealand fears, which he well understood and which he had to deal with, arose from the fact that E.E.C. regulations with other commodities had led to surpluses.

But, he emphasised, the sheepmeat regulation could not come into being without the consent of third countries and' in that context New Zealand was the main one.

Mr Gundelach indicated that as this was the first time such a proviso had been established it was an assurance of the good faith of the E.E.C. towards New Zealand.

He said the “frightful words” — intervention and export restitutions —

had appeared in the. draft sheepmeats regulation promulgated in April. These had aroused New Zealand fears that he well understood. But over the E.E.C. budget issue the Common •Market had been in its deepest crisis so far and it had to have compromise. “However,” said Mr Gundelach, “we were not willing to do just anything and we introduced market intervention on lamb as one option, slaughter premiums for European producers being the other.” The aim was to secure the incomes of small French farmers. Now in the revised sheepmeats regime an element of market intervention was proposed which would apply only in France and which would be used only as a very last resort.

Intervention would apply only in the autumn and winter months and the point at which it would apply was so far down’ from the market price that it was not unlikely to be used at all. “Therefore,” said Mr Gundelach, “New Zealand has nothing to fear. “Export restitutions have been proposed to the E.E.C. Council of Ministers but they are not intended to enable the E.E.C. to gain a bigger share of the world lamb market.

“In any event, we export only 5000 to 6000 tonnes of lamb, and compared with exports from New Zealand, that is not an enormous quantity.” Mr Gundelachi said a subject for negotiation with New Zealand was a voluntary ceiling of shipments of lamb to Europe. Again, the intention was not to cut down on normal New Zealand trade. ■ In return for that, the

E.E.C. offered a significant cut in lamb import levy. “No,” said M r Gun delach, “it is not an abolition ;of the levy. That I cannot afford.” / He believed that under this arrangement New Zealand would, in fact sell more lamb than without it at least under present circumstances because there was a trend toward less lamb being sold in Britain as other meats took up more of the market. The best information at present was that French prices would fall while British prices rose fractionally. Thus there would be a narrowing of the price gap to maintain consumption. Mr Gundelach said he had not come to New Zealand with a mandate to negotiate on the proposal for the New Zealand butter quota to Britain to be reduced to 90,000 tonnes by 1984. He did, ’ however, have support from some E.E.C. countries for the proposal and there was not a single member State which said that New Zealand butter exports to Britain must stop after 1981.

Disagreement among the member countries was on the amount New Zealand could send.

Questioned about the continual shrinkage of the British butter market, Mr Gundelach said buttermargarine price relativity was something all butterproducing countries faced.

He believed the trend in butter consumption was inevitable and that no adjustment to the import levy would alter it. Part of the butter arrangement proposed for New Zealand, however, was a better price for the reduced quantity.