E.E.C. sheepmeat and beef

Press, 17 January 1986, Page 14

E.E.C. sheepmeat and beef

New Zealand is by far the largest exporter of lamb to the European Economic Community and, when there is any criticism of imports of sheepmeat into the Community, it is New Zealand that is being discussed. French Parliamentarians refused to support a resolution adopted by the European Parliament because the resolution did not mention imports. Two amendments which dealt with imports were put forward by the French, but were lost. Mr Alasdair Hutton, a British Conservative member of Parliament and a member of the European Parliament who visited New Zealand last year, apparently believes that New Zealand is resigned to a reduction in its access for sheepmeat. In this he is surely mistaken. Neither the European Parliament nor Mr Hutton’s views would seem to present any real problem to New Zealand in the immediate future, although there is clearly some agitation about sheepmeat exports to the Community and there may be more to be worried about in the future.

The European Parliament neither sets quotas nor has much influence on the European Commission or the Council of Ministers, which are the main policy and decision-making organs of the E.E.C. However, the views expressed in the European Parliament reflect political concerns within the E.E.C. and will not be ignored completely. The final resolution showed that the European Parliament was worried about the cost of sheepmeat production in the E.E.C., was alarmed at the prospect that the present system would encourage production by subsidies and discourage consumption by high prices; and was concerned about differences among the member States in the sheepmeat trade. If there is a threat to New Zealand in the present moves, it lies in the E.E.C. tendency to seek compromises when changes are made. If serious reforms are proposed, the question of imports of sheepmeat is certain to be raised. New Zealand’s sale of lamb to the E.E.C., mostly to Britain, is under an arrangement different from the arrangement governing the sale of butter. When the E.E.C. decided to

introduce a sheepmeat regime, New Zealand was granted access for sheepmeat. It has agreed to send not more than 245,000 tonnes a year. This was not a guaranteed sale, but the amount New Zealand could try to sell in Europe. The agreement was included in the General Agreement on Tariffs and Trade. For its sale of butter, New Zealand has to negotiate with the European Commission from time to time. Access for butter has been decreasing each year. The next negotiation for butter will be this year, and the amounts that New Zealand is able to send in 1987 and 1988 will be decided. If the pattern is the same as for 1984, 1985, and 1986 — that is, an amount decreasing by 2000 tonnes a year — it may be expected that New Zealand will be able to send 77,000 tonnes next year and 75,000 tonnes in 1988. Because New Zealand’s sale of sheepmeat is under G.A.T.T., the E.E.C. would be cautious not to be seen as breaking an international agreement. The real conflict will come if the E.E.C. starts producing more sheepmeat than it needs for its own consumption. w At the same time as the European Parliament was debating the sheepmeat problems in the Community, the European Commission was putting the final touches to new measures to reduce the amount of beef the E.E.C. holds. The surplus of beef in the Community illustrates graphically what can happen when production is encouraged by subsidies and consumption discouraged by high prices. The E.E.C. occasionally tries to lower the height of its beef mountain, and this is one more attempt. Unhappily, the attempts often have adverse effects either for other beef exporters, such as Australia, or even for sheepmeat producers, such as New Zealand. The E.E.C. sells its beef cheaply; arid beef can displace other products from other producers in the market. The E.E.C. is not totally irresponsible in this; but such responsibility as it exercises in trading is no substitute for a more sensible policy towards production.