THE PRESS WEDNESDAY, SEPTEMBER 24, 1980. Australia and the E.E.C

Press, 24 September 1980, Page 20

THE PRESS WEDNESDAY, SEPTEMBER 24, 1980. Australia and the E.E.C

Australian threats to divert import business from Europe to trade elsewhere are not the first. This time, in negotiations over sheepmeats between the Australian Minister of Trade and Resources, Mr Anthony, and the European Economic Community, the threats may be carried out. Already there are reports that insistence on full customs inspection will delay the delivery of European wines into merchants’ stores, thereby causing the price to rise. Delays in purchasing aircraft have been threatened and a figure of $1 billion in imports has been mentioned as being the amount at stake.

Australia wants the E.E.C. to take more Australian sheepmeat. In other threats in the past Australia has said that it would retaliate against European exports to Australia and that it would refuse to supply Europe with certain exports from Australia, notably uranium. This threatened export ban has not been mentioned so far in the present discussions.

Australia has every reason to be chagrined about the E.E.C. The Common Agricultural Policy hurt Australia’s trade with European countries more than it hurt any other single country’s trade. In the further interests of the C.A.P., this time to bring sheepmeat under its rule, Australia is being asked to restrain its sheepmeat exports to the E.E.C. Previously Australia lost a butter market, a cheese market, and near enough to a beef market. Like New Zealand, under the General Agreement on Tariffs and Trade, Australia regained some access for cheese; but this was small compensation for the huge beef market that it once had.

The extent to which Mr Anthony will go in the present case will be interesting to New Zealand. The negotiations are taking place at the height of the election campaign in Australia and Mr Anthony is the leader of the National Country Party, which draws much of its support from farmers—mainly small farmers. The threats may be a serious negotiating stance; they are also, likely to be designed for the purposes of domestic politics.

The tactics will be familiar to the E.E.C. Most trade negotiations are tough and threats of retaliatory action against unwanted restrictions are rarely far below the surface. To accept Australia’s position, the E.E.C. would have to overthrow one of its most cherished policies. The negotiations may reveal how valuable Australian trade is in E.E.C: eyes and reveal something of Australia’s strength as a market and as

a supplier of commodities to Europe. If Australia is successful in its negotiations, it may be expected to embark on a rediscovered course of diplomacy based on access to its resources and market.

Comparisons are sometimes drawn between., the Australian approach and the New Zealand approach to the E.E.C. and the question is asked whether New Zealand would do better if it took a harder line. Yet the differences are immense. For one thing, what has Australia got to lose? Its beef trade is negligible, as is its cheese trade. Its trade in sheepmeats is less than onetenth of New Zealand’s. Australia’s

maih markets are elsewhere. For another, some of Australia’s minerals are wanted badly by Europe. Australia is also an area of considerable capital investment by Europeans. This is in distinct contrast with New Zealand’s position.

This year New Zealand is able to export 115,000 tonnes of butter to Britain, and Britain is still New Zealand’s main market for lamb. On the other hand New Zealand has no resources without which the Europeans cannot manage. European farmers would be delighted to see an end to the supply of New Zealand’s butter and cheese. In short, Australia, because of its resources, has more economic power. New Zealand could not do without the European market and the European market could do without New Zealand. The tactics adopted by Australia canmot be copied by New Zealand. A possibility of co-operation between New Zealand and Australia remains. In the context of closer economic relations between the two, co-operation in third markets over agricultural produce is a matter of importance. Mr A. F. Wright, president of Federated Farmers, made the point in a lunch-time discussion yesterday arranged by the Christchurch branch of the Institute of International Affairs and the Canterbury branch of the Economic Society of Australia and New Zealand. As Mr Wright said, Australia always argues for a good deal for New Zealand from the E.E.C. for the very good reason that, if New Zealand’s agricultural produce now going to Europe were diverted elsewhere, it would compete with Australian exports. Co-operation already exists. Nevertheless, New Zealand would undoubtedly suffer if by some means it identified itself totally with the Australian position and if it were treated by the E.E.C. in the way that, .unhappily, Australia has been treated.