U.S. wheat sales

Press, 30 July 1986, Page 20

U.S. wheat sales

The concern being expressed by Australia over legislative moves in the United States to sell subsidised wheat to the Soviet Union and to China is well founded. In the 1984-1985 year Australian sales of wheat to the Soviet Union and China amounted to sAust67l million. The United States Senate has passed an amendment to a bill approving the sale. The Australian Government will send a delegation which includes representatives from the major parties to the United States to attempt to have the legislation altered. The party will be led by Mr John Kerin, the Minister for Primary Industry, and both the National Party and the Liberals will have representatives on the delegation of five. The issue has been judged by Australian political leaders to have very serious implications for the relationship between Australia and the United States. Both the Australian Prime Minister,. Mr Hawke, and the Australian Defence Minister, Mr Beazley, are openly supporters of the United States. The Australian Foreign Minister, Mr Hayden, and the Australian Treasurer, Mr Keating, suggested that Australia should use the American bases in Australia as bargaining chips in the trade dispute.

This suggestion has been firmly rejected by a meeting of senior Ministers. The joint military facilities aside, the Australian Government and some members of the Opposition fear that there will be a backlash of Australian opinion against the United States if the sales go through. The United States and Australia have become closer over the last two years, partly because of the dispute about defence between the United States and New Zealand. Mr Hawke wants to see that greater closeness nurtured. The Australian economy is in the doldrums and one of the bright hopes was the continued sale of wheat. The loss of sales because of the action of the United States would certainly damage the Australian economy further and would make life difficult for a Prime Minister who has been an enthusiast for the United States relationship.

One of the points made about the dispute over A.N.Z.U.S. between New Zealand and the United States has been that New Zealand has lost the usually favourable consideration of the United States in matters of trade.

The United States Administration has always denied that it is imposing any sanctions against New Zealand in other than the supply of military intelligence; yet it can readily be assumed that the Administration will be less well disposed than it once was towards New Zealand when American domestic considerations are in conflict with New Zealand’s trade. Although New Zealand has supporters in the United States on the nuclear ships question, reliance on a sympathetic view from the United States Congress has been considered unsound. Australia is now finding a lack of sympathy, notwithstanding the steadiness of its military alliance. The point of the present Senate action will not be lost either on the New Zealand or Australian Governments. The amendment still has some distance to go before it becomes law. The House of Representatives has its own procedures for considering legislation and it may take time. The promoter of the amendment is Senator Robert Dole, one of the contenders for the Republican Presidential nomination in 1988. Senator Dole is from the wheat-growing state of Kansas. More immediately, there are Congressional elections this year and members of Congress from agricultural areas will see good reason to support the sale of surplus wheat to China and the Soviet Union. The Australian position has caused a split in the Reagan Cabinet. If the President decides to oppose the sales, a significant split seems likely between the President and Congress. The subsidised sales aspect is strikingly similar to that which faced New Zealand in its dealings with the European Economic Community over butter and over the sale of beef. The E.E.C. has subsidised production of butter and beef which compete with the unsubsidised New Zealand products. So far, the United States has sold subsidised wheat in North Yemen and Sri Lanka to Australia’s disadvantage. These are markets to which Australia has sold previously. American sales there cannot compare with the possible sales to the Soviet Union and China.

Apart from the sympathy New Zealand must feel for a fellow agricultural producer caught in a situation akin to New Zealand’s own, the New Zealand economy has become closely bound to the Australian economy and Australia’s prosperity is increasingly .important to New Zealand.