N.Z. loses argument on lamb exports

Press, 16 November 1981, Page 2

N.Z. loses argument on lamb exports

NZPA staff correspondent Washington

New Zealand will no longer be able to argue that because its lamb exports to the United States are frozen meat they do not compete with locally produced fresh meat.

That argument, presented at a recent hearing into lamb imports in Washington, has been firmly rejected by all six members of the United States International Trade Commission. But the commission is strongly divided on the question of whether the frozen imports have harmed, or threaten to harm, the American domestic fresh lamb industry.

Two of the commissioners are ; adamant that the New Zealand imports have had nothing to do with the problems of American lambgrowers. The other four are equally ’ positive that there is evidence that imports are a factor in the plight of the United States lamb industry. This is the picture that emerges from the commission’s formal report on their preliminary finding on the case.

The National Wool Growers’ Association is seeking a rise between 15. and 20 per cent in duty on New Zealand imports to offset what it calls illegal subsidies in the form Of the New Zealand Government’s export’ tax incentives.

In a four-two vote on October 29, the I.T.C. held that there was a “reasonable indi-cation”-that the imports had injured, or threatened to injure, the domestic industry. The United States Commerce Department is now considering whether the export tax incentives in American law amount to a subsidy. If it finds that they do, it will estimate the value of the subsidy and return the case to the I.T.C. for a final hearing.

The six commissioners were unanimous in ruling that the frozen imports are “a like product” to fresh domestic lamb.

“They are virtually interchangeable and compete head-to-head in the marketplace,” the commission’s chairman, Mr Bill Alberger, and a commissioner, Mrs Paula Stern, said in their finding, published on Saturday.

But they differed greatly With their colleagues on the question of injury to the local industry. Although the profitability and prices of local growers fell in 1980 and 1981, “the record clearly establishes that the allegedly subsidised imports from New Zealand did not contribute to such declines,” they wrote. They said that there was no correlation between domestic and imported prices. “Obviously, the problems being experienced by domestic growers must be attributed entirely to factors other than imports,” they said.

Their four colleagues said that the investigation had showed that further inquiry into the case was warranted.

In a joint finding, they said that the “long-term deterioration in the output of the United States lamb industry must have seriously weakened its ability to withstand even slightly increasing import competition.” “Given this clearly vulnerable, though viable, industry, we have found that the impact of imports of lamb meat from New Zealand has been such that the continuation of this investigation is warranted,” they said. A commissioner, Mr Eugene Frank, noted separately that “New Zealand in recent years has shown skilful and aggressive marketing capabilities.” ■ The Commerce Department is .expected to rule on the subsidy question within the next two weeks. A final decision in the case may not be made until February. ’