U.S. lamb import seems 'inevitable’

Press, 30 April 1981, Page 2

U.S. lamb import seems 'inevitable’

NZPA Washington Higher import duties on New Zealand lamb sales to the United States are regarded as “inevitable” after an appeal by American sheep farmers. All that is in question is how much the new duty will be. The sheep farmers are asking for a duty of 15 to 20 per cent to offset what they describe as “numerous” subsidies from the New Zealand Government for the “production, processing, exportation, and promotion of New Zealand lamb imported into the United States.” The National Wool Growers Association, which has filed a countervailing duty petition with the Department of Commerce, claims that these subsidies provide unfair competition to domestic lamb producers. The Department of Commerce has only to find that the subsidies exist in contravention of America’s countervailing duty law to order a higher import duty. It has already ruled that at least two of the 12 alleged subsidy counts cited by the wool growers are unfair “bounties or grants” in American law.

That ruling came in the

recent Delta Plastics animal ear tags case. “If they were subsidy programmes then, they will still .be subsidy programmes now,” one Commerce Department source said yesterday!

The source said “the chances are very strong” that the department would repeat its affirmative finding on the two counts — the export tax incentive scheme and deductions from taxable income for increases in export sales. The Department will consider 10 further alleged subsidies cited by the Wool Growers, who, in the words of the Meat Board’s Washington lawyer, Mr Ed Farrell, have “thrown in the kitchen sink.”

These range from the Meat Board’s activities to the Government’s fertiliser and other production subsidies, the guaranteed minimum price scheme and even the Government’s role in adjusting exchange rates when New Zealand costs move faster than those of its trading partners.

The wool growers have also accused the Australian Government of subsidising its lamb exports to America and are seeking import du-

ties on Australian lamb of 10 to 15 per cent. New Zealand is by far the biggest supplier of foreign lamb to the United States, with sales worth . SUS3I.3 million last year. Australian exports were worth SUS4.I million.

The case is very different from the Delta ear tags affair, because the tags enter America duty-free while lamb is already subject tb a duty of 1.5 c a pound. This small duty fundamentally alters the countervailing duty procedures. American producers seeking protection against duty-free items have to prove to the United States International Trade Commission that they have been injured by imports.

There is no such requirement for goods already subject to an import duty. Although the Commerce Department made an affirmative ruling on subsidies in the Delta case — recommending an import duty of 13.18 per cent —• the I.T.C. threw out the application, holding that there was no evidence of injury.

Now the Commerce Department merely has to find that subsidies exist to impose an extra duty.