N.Z. exports subsidised?

Press, 29 July 1980, Page 17

N.Z. exports subsidised?

NZPA Washington The New Zealand Government’s entire export tax incentive programme could come under scrutiny in a test case being filed in Washington under American law. The case involves a small export trade, worth less than $l7 million a year, but it has direct implications for every New Zealand export to the United States which is subject to New Zealand Government’ tax incentives.

This would . include exports of most manufactured goods, worth more than $6O million a year, and the lamb trade, which was valued at $3O million in 1979, and could top $4O million this year.

The question at issue is whether the export tax incentives amount, under United States law, to subsidies which unfairly affect American producers. The case being filed concerns exports of ear tags for animals made by Delta Platics, Ltd, of Palmerston North. “It is a small trade, but this is a test case,” said Mr D. O. Walker, the commercial Minister at the New Zealand Embassy in Washington. . “Every New Zealand export which is subject to New Zealand Government incentives is vulnerable to this kind of action. It raises a question over a major area of our trade policy. The implications are enormous.” A company in Wyom-

ing, which also makes animal ear tags, is filing a case with- the Commerce Department claiming that its trade has been unfairly injured by the imports from New Zealand. It seeks the imposition of duties on the imports (now admitted duty free) to balance what it claims are production subsidies from the New Zealand Government

The countervailing duty action was lodged, and then withdrawn because it had not been filed correctly. But the Commerce Department expects it to be resubmitted.

If the department finds that there is a case, it will go to the United States International Trade Commission for a final decision.

American sheepfarmers are working on a similar complaint about export tax incentives for the New Zealand lamb industry. They have employed lawyers in Washington to advise whether they have a case for a similar complaint While not underestimating the seriousness of the case for New Zealand, Mr Walker said an action of this nature demonstrated the success of the Palmerston North company in developing its export markets. “I am encouraged by the fact that New Zealand exports are so competitive that they can make such a strong impact on the United States market,” he said.