Warning on move to processed exports

Press, 24 July 1984, Page 12

Warning on move to processed exports

NZPA staff correspondent London The Labour Government will have to move slowly in shifting to processed exports, the Meat Board’s chairman, Mr Adam Begg, has warned. However, Mr Begg told reporters in London that he was not expecting any “wholesale disruption” to exporting because of Labour policy. Commenting during a two-day visit to Britain’ about the change of Government, Mr Begg said he did not expect it would have any effect on the Meat Board in the short term — “the. next 18 months.” “Trade policy in New Zealand in the past has generally remained fairly much aside from the internal politics, whatever Government has been in, Labour or National. “They have generally maintained trade policy continuity and I would ex-

pect that to continue. “But,” he added, “there have been statements by the Labour Party in the past that they intended to move away from the carcase trade and encourage further processing in New Zealand. “That’s something we ourselves have endorsed. But it’s a matter of practicalities and in this country (Britain) there is and there will be a continuing demand for carcases for a long time.” Mr Begg said that he thought “that is recognised by the leadership of the Labour Party. “I don’t think, despite some comments that may have been made, we are going to see wholesale dis-, ruption.” A move to processing would “have to be an evolutionary thing, rather than something that is imposed.” “The marketplace will continue to call the tune,” he said. Mr Begg also warned that Labour must hold inflation.

Commenting on New Zealand’s devaluation, he said, “I don’t know if it’s good news.” “Based on past record, no government in New Zealand has been very successful in holding the effects of a devaluation. “I think this Government, coming in as it is in the situation it’s in, will have a firm resolve to hold it. It may well, but it’s a very difficult job.” Mr Begg, in London for two days after a trip to the United States, said devaluation had been becoming inevitable but “in itself doesn’t cure anything. “Provided the Government can hold the internal situation yes, it would be good news.” However the “two-edged sword” of devaluation would mean fanners facing a “much bigger bill” for purchases such as diesel and tractors. “Something like 6 to 7 per cent of the 20 per cent (devaluation) goes straight through into internal inflation,” Mr Begg said. He said there was worry about inflation. New Zealand’s meat trade with Europe had room for some improvement, but maintaining the currency value at its new level was important.