THE PRESS WEDNESDAY, OCTOBER 28, 1981. Crisis in meat sales

Press, 28 October 1981, Page 24

THE PRESS WEDNESDAY, OCTOBER 28, 1981. Crisis in meat sales

The.threat to New Zealand meat exports to the United States has now grown to crisis proportions. Both Houses of Congress have passed amendments to a farm bill, the effect of which, if they became law, would be to stop imports of meat from New Zealand. Several steps still have to be taken before the amendments to the bill become law, but the chances now seem strong that New Zealand will have to rely on the Presidential veto. The next move is for a joint committee of the House of Representatives and the Senate to consult on the two amendments and to come up with a wording that is acceptable to both Houses. Thereafter the agreed amendment would be submitted to both Houses and, if approved, to the President for his signature. If he declines to sign it, he must give his reasons for the veto. It is improbable that the joint committee will discard the amendments altogether. The most likely course of events after the committee meets next Wednesday is for the agreed amendment to go to the President.

The two versions differ but not significantly enough for one to be discounted. The Senate version is the more sweeping. It seeks to ban imports of meat which are produced with agricultural chemicals or animal drugs or medicated feeds which are not currently approved for the same use in the United States. The House of Representatives version refers to agricultural chemicals and other chemicals, the use of which is prohibited by the United States. The Senate version entails exclusion unless the same chemicals are approved for use in the United Stages; the House version limits the exclusions to chemicals now banned in the United States. Either way it would not be difficult to find some way of preventing all of New Zealand’s exports to the United States from entering that country. If either of the amendments to the farm bill became law, the United States may be in technical breach of the General Agreement on Tariffs and Trade code which refers to non-tariff The code is an attempt to prevent countries from imposing particular requirements, other than duties or tariffs, that have the effect of restricting trade. In this instance it is not that there would be some residue in the meat,, but that, particular chemicals would be used in the production and processing of the animals. When this specific issue. was raised, in one of the negotiating rounds, both New Zealand and the United States were opposed to the processing and production methods being

considered as a way of determining standards. Presumably the United States could be found to have breached G.A.T.T. and be subject to some form of discipline. The United States may just be big enough to live with such discipline and still stick to its own laws excluding imports of meat. The arguments raised in the United States against the amendments include that such action as they envisage would invite retaliation from other traders. In the instance of New Zealand, the market it represents is not of sufficient size to have a noticeable effect on the United States if New Zealand decided to retaliate. In any event, New Zealand has a great deal to fear from retaliation. Even if all the countries affected by the proposed law were to unite in retaliation, such action invites the danger of setting off a trade protectionist war. Trade protection around the world is something that New Zealand has cause to fear.

The amendments also are directly opposed to any principle of free trade to which the Administration is theoretically committed. President Reagan will dislike the content of the amendments, but it remains to be seen whether he will agree to some compromise to balance something that he wants elsewhere in the farm bill or in another legislative measure. He may find it intolerable that the Congress should stop meat imports to protect American farmers.

The protectionism in agricultural trade that is so apparent in the United States at the moment is not new. In most years some measure is proposed to limit imports of one farm product or another. This year the efforts have gone further. Probably this has come about because of the fairly low prices for beef in the United States and the situation has doubtless also been influenced by the Australian horsemeat substitution scandal. Unless President Reagan uses his veto on the amendment that finally emerges, the effects of New Zealand’s trade in meat with the United States will be catastrophic.

Presumably the President will intervene, but the protectionist mood in Congress will continue to be a threat. As the biggest exporter of agricultural products in the world, the United States should understand the uncertainties of agricultural trade. It must be hoped that good sense will prevail so that to the troubles of weather, crop failure, and animal diseases, which some agricultural chemicals can help alleviate, will not be added the vagaries of a protectionist Congress.