THE PRESS FRIDAY, OCTOBER 15, 1982. Will trade talks be a mockery?

Press, 15 October 1982, Page 16

THE PRESS FRIDAY, OCTOBER 15, 1982. Will trade talks be a mockery?

Not much more than a month before some of the most significant talks about world trade for many years, the European Economic Community has said that agricultural subsidies should not be discussed at that meeting. New Zealand is the victim of policies in the E.E.C.. in the United States, and in Japan, that subsidise agriculture. If the E.E.C. proposal were adopted, it would come close to emptying the talks of all meaning for New Zealand.

New Zealand would still have an immediate interest in seeing trade kept open for its manufactures and would have an indirect interest in seeing the world’s trading system kept open. Agriculture and the exports from our farms remain what the New Zealand economy is almost all about. Agricultural exports account for 73 per cent of New Zealand’s exports. If forest products are considered as produce from the land, the proportion is 82 per cent of the country’s exports. To say that the distortions in world trade brought about by protectionist policies should not be a proper subject for discussion is to make a mockery of the talks.

The talks are at the Ministerial meeting of the General Agreement on Tariffs and Trade. Such meetings are important, but infrequent; the last was held in 1973. The 1973 meeting gave rise to a series of negotiations, called the Tokyo Round. The new meeting at Ministerial level was proposed during 1981. Its primary aim is to avert a growth in world trade protectionism. Although it is not expected to launch another round of the multi-lateral trade negotiations of the kind that made the Tokyo Round, it is hoped that there will be a clear expression of political will to resist protectionism. The forces of protectionism increase as the world recession deepens. If protectionism becomes rampant, the recession will undoubtedly become worse and the recovery of the world economy slower.

The Minister of Overseas Trade, Mr Cooper, has made statements that sound determined about standing up to the E.E.C.’s attempt to keep the subject of agricultural subsidies off the agenda. This is not the first time that the E.E.C. has tried similar tactics. In fact, agriculture has generally received scant attention in G.A.T.T. negotiations, and when it has received attention it has confined itself largely to grains, which are of immense significance to the United States. In some instances, specific waivers from G.A.T.T. rules were given for agricultural products; in others a vast system of agricultural protectionism has been constructed under what were supposed to be limited exemptions from G.A.T.T. rules. Mr Cooper has threatened to use any item on the

agenda that could be held to have agricultural implications to raise the subject of agricultural protectionism. This seems a justifiable approach. In the views that he has expressed, Mr Cooper has also been making comments about reforms of the world financial system. Possibly New Zealand’s interests would be served if the world financial system and G.A.T.T. were changed to make for freer trading in agricultural products. For the sake of clarity alone it would seem unwise for him to be seen as trying to accomplish both these things. To have New Zealand pitting itself against the agricultural protectionism in the E.E.C., in the United States, and in Japan is enough for one meeting without its being seen as trying to overthrow or reform the world financial system as well.

The extent to which New Zealand will be able to co-operate with Australia over G.A.T.T. in Geneva next month is not at all clear. Mr Cooper will doubtless confer with the Australian Minister of Trade and Resources, Mr Anthony. Although the two . countries’ interests overlap, they are not identical and New Zealand and Australian approaches tend to be different. It might be as well to keep the approaches distinct. The aims that New Zealand hopes to achieve in the G.A.T.T. Ministerial meeting were announced this week. The first is that there should be a clearly stated political will to resist protectionism. The meeting is being attended by Ministers at a senior level and they should have the authority to declare the political will of their respective Governments. The second aim is that any formal resolutions about world trade should be precise and realistic. This too, seems sensible and necessary. The ideals of free trade can be mouthed for ideological reasons and it would be unlikely that a resolution would openly support more protectionism. New Zealand’s experience in negotiating with the E.E.C. has been that it is wise to be clear about the amount of produce New Zealand would be able to send abroad, and how much New Zealand would be paid for it, and on the period for which New Zealand would be able to send it. The third New Zealand aim is that any trade movement should have a definite timetable. The fourth New Zealand aim is that whatever comes out of the G.A.T.T. Ministerial meeting, should lead to a better application of the G.A.T.T. rules and thereby ease the problems of developing countries. These are not radical propositions. In the past, the industrial countries have exercised gross hypocrisy towards agriculture. A declaration of political will to see agriculture included under normal G.A.T.T. trading rules would at least be an earnest of ending unfairness.