THE PRESS MONDAY, AUGUST 19, 1985. Unwelcome E.E.C. beef

Press, 19 August 1985, Page 20

THE PRESS MONDAY, AUGUST 19, 1985. Unwelcome E.E.C. beef

The report that the European Economic Community is sending more beef into the Asian and Pacific region is bleak news for New Zealand and Australia. Apart from the Middle East, the Asian-Pacific region is the last free market for beef in the world. Japan has strict import quotas, but most of the other countries allow demand to set the quantity they import. New Zealand sends small quantities of beef to the region compared with Australia, but they are still significant amounts when the size of the beef herd in New Zealand is considered. The damage does not stop at beef, because New Zealand also sells lamb and mutton in Asia and the Pacific. Some of it finds its way into various forms of Asian sausage and other processed meats. Cheap E.E.C. beef can as easily replace sheepmeat in these products as it can replace beef from New Zealand and Australia.

Because beef is a much bigger export commodity for Australia than it is for New Zealand, Australia has even more reason to be annoyed and alarmed. When the European Economic Community was formed Australian beef was excluded. No country was hurt as badly as Australia by the establishment of the Common Agricultural Policy. Australia had to develop some of the markets in Asia for beef, where the eating of beef was not unknown but the eating of chicken and pork was much more common. The E.E.C. acknowledged the development work of Australia in selling beef to parts of Asia in an agreement reached between the two. The latest form of the agreement was reached last summer when the E.E.C. -agreed not to send subsidised beef to particular Australian-developed markets in “foreseeable circumstances.”

To some extent, the agreement was a step forward. Previously the agreement had stretched only to “present circumstances.” There was a reassuring crumb: the agreement could be revoked only by a decision at the

highest level of the E.E.C. The designated markets were Japan, South Korea, Taiwan, Malaysia, and Singapore. The Philippines, Thailand, and Hong Kong were not covered. The main contention is not that the E.E.C. has breached the terms of that agreement, but that it is still encroaching into areas where Australia and New Zealand have a chance to divert their outlets. There is a suspicion of a breach in that beef is easily readdressed and some E.E.C. beef may be going to the nondesignated markets, the destination on the packets changed, and then trans-shipped to some of the designated countries. If New Zealand and Australia were competing on equal terms with the E.E.C. there would be no quarrel with attempts by the E.E.C. to sell in Asia and the Pacific. As it is, the European farmer is paid the intervention price under the Common Agricultural Policy and the European exporter is paid another subsidy known as restitution. Thus the taxpayers of the E.E.C. pay the European farmers to produce a huge stockpile of beef and also pay the exporters to sell the beef in overseas markets. With such a tax base to draw from and using such practices, the E.E.C. can by no stretch of the imagination be considered to be a fair competitor. Various attempts have been made by the E.E.C. to alter the system of encouraging production and discouraging consumpption by high prices, but none of the attempts has been convincing. In a number of ways the E.E.C. exerts a good influence on world affairs. It also has had a good influence on Europe itself. One of the driving forces behind the establishment of the E.E.C. was the avoidance of war in Europe again. It has contributed to that, much to the relief of New Zealand and Australia which twice sent troops to help sort out some of Europe’s mess. Now the E.E.C. would do well to sort out the trade mess it is foisting on the world.