U.S. dairy sales to Iraq upsets Government

Press, 26 October 1984, Page 3

U.S. dairy sales to Iraq upsets Government

Parliamentary reporter The United States has decided to make a substantial sale of skim-milk powder and anhydrous milk fat (butter oil) to Iraq, to the concern of the New Zealand Government. The New Zealand Embassy in Washington was informed on Wednesday by the United States Department of Agriculture of the intention to complete the sale. “Regrettable” was the reaction of the Minister of Overseas Trade, Mr Moore. He said this seemed to be another instance similar to ones in the past where the United States had made sales of substantial quantities of dairy products to Egypt and Mexico, soincreasing the pressures on the international dairy market which was so importantto New Zealand.

Unlike the E.E.C. sale, this time the United States had respected the minimum figure set by G.A.T.T. However, Mr Moore said New Zealand believed that special credit conditions had been included to make the deal attractive to Iraq. The temptation to make such

sales as the proposed deal with Iraq was strengthened by actions such as that of the European Commission to make possible substantial sales of butter below the G.A.T.T. agreed minimum price to the Soviet Union and Middle East markets. When New Zealand had heard of the commission’s intention it had immediately protested, and had predicted that it would have serious repercussions in the international dairy market, said Mr Moore. Regrettably, the United States announcement had confirmed that prediction. It was believed that the United States sale had been targeted at replacing wholemilk powder bought by Iraq from the E.E.C. It seemed New Zealand’s existing market share would be protected.

However, Mr Moore said, the proposed sale would diminish New Zealand’s chance to increase its sales of dairy produce to Iraq. As well ,it would displace quantities of E.E.C. dairy products which could only add to the E.E.C. stocks and exacerbate competition on the international market.