STATEMENT BY TI T. HON, 1. J. MCEWEN,
ACTING PRIME MINISTER AND MINISTER FOR TRADE A. ND INDUYh
ON HIS RETURN TO AUSTRALIA FROM OVERSEAS, 28th JUNLE 1966
The Acting Prime Minister and Minister for Trade
and Industry, Mr. John McEwen, returned to Australia today,
following trade discussions and negotiations in the United Kingdom
and Europe. Mr. McEwen said that the primary purpose of his visit
was to attend the Commonwealth Trade Ministers' Meeting in London,
from 13th to 16th June.
" The range of items raised at this meeting," said
Mr. McEwen, " included several that were of major importance to
Australia. The Meeting also afforded the opportunity for
bilateral talks before and during the Conference with Ministers
from other Commonwealth countries on matters of significant
interest to Australia and these individual members of the Commonwealth."
U~ iITED KINGDOM AND EUROPE.
Mr. McEwen said the Meeting of Commonwealth Trade
Ministers was given added emphasis and importance by the recent
statement of the United Kingdom Government that they would be
ready to enter the European Economic Community, provided essential
British and Commonwealth interests were safeguarded.
The Meeting received the assurance of the British
Government that there would be made available to Commonwealth
Governments the maximum information possible on the progress of
exploratory discussions with the and that at all stages
of any negotiations there would be close consultation with other
Commonwealth Governments. The Minister said the attitude of the Australian
Government towards British entry to the E. E. C. was the same as it
had always been since the possibility of British entry had arisen;
namely, that the decision as to whether or not Britain should enter
Europe was one for the British Govtrinient alone.
" But if sach entry viere being actively canvassed,"
said Mr. McEwen, " then the time for consultations with Australia
cn matters which vitally affected our trading interests was
' earlier rather than later'. As had been the case during Britain's
negotiations with the Community in 1961 and 1962, we wanted to be
sure that both Britain and the Six clearly understood the extent
of the dependence of certain Australian industries on their right
to sell on the British market. Following the London discussions,
I have no doubt that opportunities for the necessary consultations
will be afforded Australia."
COMMODITIES. Mr. McEwen said that one of the major items discussed
at the Commonwealth Trade Ministers' Meeting was the disturbing
trend of prices for a number of primary commodities which were of
crucial importance to many Commonwealth countries.
The ruinously low price of sugar on the so-called
" free" market is the most serious and immediate commodity price
problem facing Australia and the many other Commonwealth countries
which are important sugar exporters.
Mr. McEwen said that, of the total world consumption
of sugar of around 60 million tons, about three-quarters was
consumed in the countries in which it was produced. Producers
obtained the benefits of protected local markets for this share of
the total markct. The remaining one-quarter of total consumption
represented sugar traded internationally. About half of this amount
was bought and sold in accordance with inter-Governmental agreements
or special arrangements, under which sugar exporters obtained fair
and reasonable prices. Th. re. a: ini. ng seven or eight million tons,
however, was sold on the ' free'" mark-t, and the prices received
for " free" market sales the so-called " world price" of sugar
drastically affected the position of sugar producers in countries
which sold large quantities of sugar on the " free" market.
3.
In the case of Australia, almost three-quarters of
our exports from the 1966 crop will be sold at prices based on
the " free" market quotations. A variation of œ E5 stg. per ton in
the " free" market price could mean about 016 million to the
Australian sugar industry and, of course, also to the Australian
balance of payments. At the time of the London meeting, the so-called
world price of sugar had fallen to less than œ-17 stg. per ton for
raw sugar, the lowest level since the 1930' s. It had since
fallen to œ-16 stg. per ton, less than half the price required to
provide a remunerative return to even the most efficient sugar
industries in the world.
Mr. McEwen said this was an intolerable situation.
" The present ' world' price," he said, " means a return of less
than 2 cents a lb. to exporters of sugar, whereas the average
price paid by consumers is about 8 cents per lb. in terms of raw
sugar. International action to raise substantially the twrd
price of sugar is an urgent necessity."
Mr. McEwen said that, unfortunately, negotiations
aimed at securing a new and satisfactory International Sugar
Agreement were not making the progress which had been hoped for.
The unanimous declaration by Commonwealth countries at the London
meeting of Trade Ministers that they would join in supporting
effective arrangements to get a better sugar price was a most
helpful step forward. In his opinion, the Meeting of Commonwealth Trade
Ministers had been most worthwhile if for no other reason than
that Ministers from all countries had declared themselves,
unanimously and unambiguously, as being determined to achieve an
improvement in the sugar price situation.
Mr. MoEwen said that he had referred particularly
to zugar because this is a commodity of paramount importance to
Australia and to the development of the North, and to many other
Commonwealth countries. Dit tlip Mpeting hadl also ounsidered the
problems of other bulk cormmodities and the action needed to
improve the conditions of trade in regard to them. Wheat, meat
and dairy products are examples of bulk commodities of particular
interest to Australia, while tin, rubber, cocoa and coffee are
among commodities of great concern to a number of other Commonwealth
countries and to Papua and New Guinea.
The Meeting had agreed on the objectives to be
sought in present and future international commodity negotiations
on these commodities. Mr. McEwen said he was sure this would
result in Commonwealth countries better concerting their efforts
in working for improved trading arrangements for the major
commodities.
KENNEDY ROUND. Another major item was discussion of the GATT
Kennedy Round of trade negotiations. This, too, was a matter of'
urgency, since progress in the negotiations had been very slow.
The authority given by the United States Congress for United
States participation lasts for barely another year.
Commonealth Trade Ministers were all agreed that
the potential benefits of the Kennedy Round were such that the
Commonwealth should, as a group, do everything possible to bring
a sense of urgency to the negotiations.
Mr. McEwen said that, if the Kennedy Round failed
to produce worthwhile results, there could well be a widespread
sense of disillusionment against the ideals of multilateralism
in world trade. This might then lead to a tendency towards groups
of countries combining to form highly protective trading blocs.
The European Economic Co:-eunit;' possibly enlarged could be
one such bloc; the countries of the North and South American
continents another; and the Communist countries a third.
Australia, and gthGr countries not easily falling within such
groupings, could find themselves isolated and confronted with new
restrictions on their trade opportunities.
At a time when the growth and prosperity of Australia, and indeed
of every country, depends so much on maintaining a continued
expansion of exports, such a development would be deplorable.
It is, indeed, a major reason why a successful outcome of the
Kennedy Round is of fundamental importance.
Mr. McEwen added that, if the Kennedy Round failed,
and there followed the emergence of a series of powerful trading
blocs, the many new and developing nations of the world would,
no doubt, be forced to seek attachment to one or another of the
blocs. This, he said, could provide a fertile field for political
competition in which he could see nothing but danger and tension
the very reverse of the objective of maximum freedom in trade and
other matters which we believe in, and towards which the United
States Government, in launching the Kennedy Round, had taken a
leadership initiative.
OTHER SUBJECTS. Mr. McEwen said that a numiber of other subjects were
discussed at the Trade MinistersT Meeting, ranging from trade in
manufactured exports from the lesser developed members, to the
trade promotion efforts of developing countries and means of
stimulating tourism. " In all cases," said Mr. McEwen, " Commonwealth
Ministers were able to reach agreement on the most useful
means of co-ordinating Commonwealth efforts in these fields."
The Minister said he was particularly heartened by
the support expressed by developing Commonwealth countries for
the Australian initiative in legislating for a system of
preferences to apply to a range of products of interest to
developing countries. " These new nations," said Mr. McEwen,
" 1need more than grand declarations if they are to grapple
successfully with the vast economic difficulties facing them, and
avoid the political trouble that so often accompanies such
difficulties. The Australian initiative was widely acknowledged
to be one of the few positive steps that have yet been taken by
any country specifically to help the trade problems of the
developing cou ntries.'' 6/..
TRADE PUBLICITY. Whilst in London, Mr. McEwen said, he had also taken
the opportunity to assess the progress being made in the campaign
to promote Australian meat, dairy products, fresh, canned and
dried fruits, eggs, other processed foodstuffs and wine.
Total expenditure in Britain on the promotion of
Australian products amounts to several million dollars a year.
The Commonwealth Govcrnment and Australian primary producers and
exporters, through the Marketing Boards, subscribe directly
01.1 million. This co-operative effort attracts associated
expenditure by cxporters and British importers of Australian
products of very substantial additional funds.
" I am sure," Mr. McEwen commented, " that this trade
publicity programme has done much to create and encourage the
demand for these Australian products in the United Kingdom
market. Without it, the returns to a wide range of Australian
producers would have been considerably lower."
Mr. McEwen added that, in recent years, a much
greater emphasis had been given to the promotion of Australian
products in markets other than Britain. He said: " We are
producing more~ our development needs require ever-increasing
earnings of foreign exchange; and there are uncertainties abo-. c
Britain's ultimate action in regard to the Common Market. All
these considerations make it necessary that we exploit every
possible marketing opportunity."
TRADE AGREEME.' TS -A BULTRIA APD POLARD.
Mr. McEwen sa: i tt 5follow. ing the London meeting,
he had visited Poland a and had concluded trade
agreements with these counri. s.
Mr. McEwon said that Australia had given most-favourednation
tariff treatment to Poland and Bulgaria for many years.
However, exporting to countries which controlled their imports by
measures other th?. tariffs had no predictable basis.
As a general rule, such countries prefer to buy from countries
with whom they have trade agreements. In recent years, many
Western countries have negotiated trade agreements with nations
of Eastern Europe. The Minister said that, last year, Australia
concluded a reciprocal, most-favoured-nation Trade Agreem-ent with
the Soviet Union. Following this, Poland and Bulgaria had sought
trade talks with the object of concluding similar agreements.
His visit and the Trade Agreements which had been signed were
the outcome of these requests.
Mr. McEwen said the now Agreements accorded to
Poland and Bulgaria, as of right, the most-favoured-nation tariff
treatment they had hitherto enjoyed. From the point of view of
Australia's interests, we now also have assured entry to these
markets on the equivalent most-favoured-nation basis.
Mr. McEwen added that Australia enjoyed a favourable
trade balance with both Poland and Bulgaria a substantial
balanco in the case of Poland, which was a valuable buyer of
Australian wool. R'oth countries were undertaking industrialisation
programmes, with heavy investment in a wide range of manufacturing
industries. This offered the prospect of increasing opportunities
for the sale of Australian raw materials and possibly also beef,
mutton and other foodstuffs. At the same time, it could be
expected that the products of the new manufacturing industries
in Poland and Bulgaria, which are already significant exporters
of certain specialised types of machinery, would be of increasing
interest to Australian industries. The new Trade Agreements would
provide a very useful framework for the development and expansion
of Australian trade with Poland and Bulgaria.
Sydney, 166
28hJune, 196