Sovereign State

Trading follies

Philip Hewland

"The folly of an industrial nation putting barriers between itself and the supply of inexpensive high quality food and raw materials which it cannot hope to produce in sufficient quantity itself is too great to be credible."

At least I thought so when I addressed in these terms the conference of the Royal Agricultural Society at Edinburgh in 1971 on behalf of the Royal Agricultural Society of New Zealand. And more:

. "By entry into the EEC, Britain will retreat inside the barriers of an economic bloc at the very moment when western civilisation demands for its survival not the division of western unity, as between Europe and the rest, but the enlargement of human horizons, The result will be disastrous in ways which are not Yet generally comprehended." Today it is not at all surprising to find that With Britain's abandonment of her historic trading agreements with primary producing nations, such as the sugar producers, the meat aind dairy producers and raw materials sup Pliers, those countries are having to look elsewhere for trading parties, leaving us short or Potentially so of necessary supplies, victims therefore of inflated prices. Nor was it surprising to hear the Prime Minister of Jamaica telling London Weekend Television's Weekend World on March 2 of Producing countries establishing cartels to control the supply and pricing of raw materials Upon the sale of which they depend for a living. We in Britain forget the basis upon which our economy has developed over the last half-cen,turY. We held the advantage over the rest of Europe in that we had negotiated in the 'thirties two-way trading agreements with producing countries under which we were assured of . supplies of food and raw materials at reasonable prices, and in return for access to the British market those countries granted preferential treatment to imports from Britain. But as soon IS the Macmillan government in the early 'sixties began sending emissaries out to Hlitain's trading allies talking of Britain's access to the Treaty of Rome, the producing countries had to take steps to protect their future. Take New Zealand, for example. You cannot dismiss her as a small, unimportant supplier or market. New Zealand is the world's largest exporter of meat and dairy produce. New Zealand and Australia used to be substantial and protected markets for most items of British production — notably motor cars.

New Zealand's trade union leadership in the early 'sixties pointed out to the British TUC the dangers to British workers' jobs and their Sunday roast if Britain went into the EEC. They were remarkably prophetic. And Sir John Ormond, the chairman of the New Zealand Meat Producers' Board, many times declared that the industrial nations of Europe could not hope to achieve greater wealth at the expense of the producing nations, in the manner

envisaged by the EEC. This, too,

sadly true. is proving

, While Duncan Sandys was in New Zealand in 1 61 as Macmillan's emissary the New Zealand Meat eat Producers' Board had already sent delegations around the world in search of a_lternative markets. The New Zealand Dairy Board did the same. And when Japan began for the first time in its history to import meat, New

Zealand had to begin to buy Japanese broadcasting equipment instead of British.

In that lay one of the seeds of Britain's present balance of payments problems. Today the British motor industry for one, is feeling the consequence. It has had to see its market in New Zealand severely eroded. Japan has in some respects filled the trading role in the Pacific which Britain has abdicated. These circumstances have been duplicated elsewhere.

After fourteen years of this erosion of Britain's trading base, those who argue for Britain's continued membership of the EEC will tell you that 'Commonwealth trade is no longer significant.' Some of the lesser New Zealand and Australian politicians are even persuaded to take the supposedly sophisticated view that "you can't put the clock back."

It is, of course, not a question of putting the clock back but of trying to make it go forward again. The damage that has-been done cannot be wholly repaired. The markets lost to British manufacturers in fourteen years cannot be easily regained. The inflation of food prices by EEC policies, and the uncertainties about future supplies will continue.

The Labour Government pledged renegotiation of the terms of British entry to the EEC, but so far no significant amendment to these terms has been achieved. New Zealand lamb meanwhile, a major item in the traditional British diet for almost 100 years, is now subject to a tax of 12 per cent imposed to meet EEC requirements and no progress whatever has been made in making firm provisions for access for New Zealand butter beyond 1977.

This latter question is no doubt being held, as it was in 1971, as a major point at issue on which the summit conference can claim a settlement.

But if Britain were to be given the right freely to import New Zealand butter this would be a significant modification of the EEC Common Agricultural Policy — so significant that it would run counter to the basic EEC philosophy of restrictionism and contrary also to the EEC attitudes throughout the earlier negotiations. It is more likely that some further delay in the full application of the CAP to New Zealand butter or some imprecise formula of words to fudge the issue will be devised.

The same question of New Zealand butter was left to the end of the Rippon negotiations under the Heath regime, thus putting the then New Zealand Prime Minister under pressure which seemed at the time intolerable.

The result was no more than assurance of access till 1977 on a price formula that obviously would prove, as it has done, gravely to New Zealand's and Britain's disadvantage. It seems something similar will happen again.

We shoula not be misled by the gentle wariness of the New Zealand approach to these negotiations. Consider the dilemma of a New Zealand Prime Minister. He has to speak with deference to the continental ministers because he is in effect on his knees to them, begging that Britain be permitted to continue to import New Zealand butter beyond the end of 1977.

Perhaps this week's meeting a the EEC heads of governments in Dublin will produce some concession to Britain's need to maintain supplies of New Zealand butter. But it remains a preposterous notion that Britain should accept any limitation of its right to import high quality and relatively inexpensive food from the world's most efficient producer, especially when it involves more expensive living costs for the British and a certain loss of export trade.

What in return for all these disabilities is Britain to gain from EEC membership? She always has had and can continue to have a .close association with continental Europe on the basis of mutual trading arrangements. Her political and military security are in no way enhanced by accession to the EEC. Her political strength and integrity will certainly be greater outside it if she will re-align her trading relationships to the wider world, in particular to the needs of those nations which have economies complementary to her own.

The EEC is already an out-of-date concept, born out of the disasters of the first half of this century and the fear of more. It was designed in a context that no longer exists. The world has already moved on from the 'fifties.

The world of the great powers has given way to the world of the many, living in interdependence. A Europe trying to maintain barriers against the inevitable will simply destroy the economic security it seeks to build.

The future of a Greater Britain is surely not with this little Europe but in her traditional role as a shrewd, effective internationalist, with whom continental Europe will, as in the past, be only too glad to be associated.

Philip Newland is chairman of an international public relations, advertising and marketing consultancy, was formerly an economic and foreign affairs commentator for the New Zealand Broadcasting Service and Director of Trade Promotion and Market Research for the New Zealand Meat Producers' Board