U.S. may seek farm bill review to ease subsidies

Press, 14 February 1986, Page 8

U.S. may seek farm bill review to ease subsidies

NZPA staff correspondent Washington

The United States Administration is likely to seek a review of the Farm Bill to get requirements for subsidised exports removed, according to the Australian Trade Minister, Mr John Dawkins. “I am now confident as a result of discussion that there will be a move to take the legislation back to Congress in order to have the mandatory provisions of the legislation reviewed and, it is hoped, repealed,” said Mr Dawkins. The Australian Minister has been in Washington expressing concern to United States Cabinet officers about the effect of the United States farm bill, passed late last year, on world trade. The Australians, like New Zealand, are particularly concerned about the mandatory provisions of the export enhancement programme of the farm legislation which requires the United States to provide SUS2 billion worth of

surplus products over the next three years to promote export markets for United States products. The subsidy provision was aimed at countering European Community subsidised exports, mainly of grains.

Australia saw itself being caught in the middle of an EC-United States subsidy war which would have a detrimental effect on Australian wheat sales.

However, the United States subsidised exports also have the potential to involve beef which has been a concern to New Zealand.

As part of a trade-off to get reduced dairy herds over the next three years, the farm bill requires the United States Government to buy up 200,000 tonnes of additional red meat. Of this, 100,000 tonnes would be disposed of in domestic gifts with the other 100,000 tonnes to be used for export or overseas military use. The United States military annually uses only 15,000 tonnes of red meat

and so in effect 85,000 tonnes could go on world markets, disrupting normal trade and depressing prices.

One fear'of New Zealand officials is that cheap United States beef sales could see New Zealand losing markets in the Middle East. While Mr Dawkins was optimistic that something might be done to stop subsidised sales of United States wheat, he appeared less confident that beef exports would be similarly dealt with.

He said he told the Administration that any United States moves into subsidised beef exports ’’would be unprecedented and potentially damaging”.

"As well, it would be quite incongruous for the United States as an importer of beef to be subsidising beef exports,” he said.

He Indicated he had not received any categoric assurances that changes would be made on beef. However, talks were continuing and Mr Dawkins

said he felt concesssions “will be addressed.”

While in Washington Mr Dawkins has held talks with senior Reagan Administration officials, including the Secretary of State Mr George Shultz; the United States special trade representative Mr Clayton Yeutter, the Commerce Secretary Mr Malcolm Baldridge, and the Agriculture Secretary, Mr John Block. In the later months of last year the New Zealand Ministers of Agriculture and Overseas Trade, Messrs Moyle and Moore, had been scheduled to hold talks with their counterparts in the United State on similar issues.

However, it was made clear that as a result of the A.N.Z.U.S. dispute and the dis-rating of New Zealand from its ’’close ally” status their respective United States Cabinet officers would not be available for talks.

The visits by Messrs Moore and Moyle were subsequently cancelled.