THE PRESS THURSDAY, AUGUST 6, 1987. Trade barriers in decline?

Press, 6 August 1987, Page 16

THE PRESS THURSDAY, AUGUST 6, 1987. Trade barriers in decline?

Many New Zealanders will not have heard of Mr Aart de Zeeuw, who is in the country on a tour that will also take in Australia, Thailand, and Japan. Mr de Zeeuw, however, had a message of quiet encouragement and guarded optimism for the future of New Zealand’s most important exports when he met the Minister of Overseas Trade and Marketing, Mr Moore, and the Minister of Agriculture, Mr Moyle, this week. Mr de Zeeuw, director-general of agriculture in the Netherlands, is also the chairman of the agriculture negotiating group for the latest round of trade talks under the General Agreement on Tariffs and Trade, and he believes there is now a chance of genuine liberalisation in the international trade in agricultural products. If Mr de Zeeuw has correctly read the mood of the more than 90 countries who subscribe to the G.A.T.T., this would be good news indeed for New Zealand. New Zealand has been one in a small group of these countries pushing to have agricultural trade treated in the same way as the G.A.T.T. treats trade in manufactures. It may be that some progress is being made to remove the artificial controls on agricultural trade, which accounts for most of New Zealand’s export income.

Simply removing the tariff barriers on agricultural produce will not by itself mean much of a liberalisation of trade, however. Difficult stumbling blocks to open trade will remain, chief among them being the raft of agricultural subsidies propping up farmers in Europe, Japan, and the United States and which have been responsible for large surpluses in agricultural commodities particularly in North America and the European Economic Community. Another

impediment to trade in agricultural produce is the use of veterinary and sanitary regulations as non-tariff trade barriers. The E.E.C., for instance, requires of New Zealand meat packing houses exporting to Europe rigorous and expensive hygiene provisions far in excess of what is required of European slaughterhouses.

An unintended consequence of these requirements, of course, has been that New Zealand now has some of the most modern and efficient meat-cutting and packing plants in the world, and will be extremely, well placed to capitalise on any freeing up in international trade in meat and meat products. All of this will take time. The E.E.C.’s Common Agricultural Policy is likely to prove a big hurdle to freer trade. Nonetheless, the recent moves by the Organisation for Economic Co-operation and Development to bring more market influence to bear on the trade is encouraging.

By producing a scheme called the production subsidy equivalent system, the O.E.C.D. has provided a starting point from which to reach a means of measuring objectively the level of subsidies in! different countries. This will be an important element in the machinery of freer trade, for without it no-one could determine whether countries were in fact reducing producer-based subsidies. Changes in agricultural trade will not, be achieved overnight; it could be another 10 or even 15 years before the sort of trade regime championed by Mr de Zeeuw and a succession of New Zealand Ministers of Trade and Agriculture becomes a Reality. At last there is reason to hope that the changes will come. J