F P 0M 3 * 2 2 015. 02. e04 23:
JOINT PRESS COt'JFERDNCE -Prime Minister and Kinister for Primary Industry,
Brussels Hilton 4. O0pm, 4 February 1985
E & 0 E Proof only
Well ladies and gentlemen I know that there are some
matters other than the matters that we we've been discussing with
the Commission that you'd probably like to address some questions
to me on, so I may I make the suggestion that we deal with the
events of today at least the events of today in Brussels with
Mr Kerin here and dispose of that mattcr and then Mr Kerin has
to go off and have some other discussions and then I'll be
available for questions on other issues.
If that is accepLable~ to you let me say that Mr Kerin and 1 today
have had lengthy discussions. Firstly, I had half an hour with
Monsieur Delors, the President of the Commission, and then we had
a lengthy session from 11.00 o'clock through till about half past
one in session and then further informal discussions over lunch until
three. I put to the President of the Commnission and then to
all the Commissioners in full session the concerns of Australia
with the impact upon Australia of the operation of the CAP. I
prefaced our exposition to the President and Commission by pointing
out that Australia did not come to the Commission on the.* basis of
asking it to adopt policies and approaches which were inconistent
with the way in which we as a Government were prepared to operate
ourselves. By that I meant that within Australia we had bdrought
the various social partners together on the basis that the
achievement of propar national objectives would best be served
by the trads unions and business seeing that their own enlightened
self interest was much more likely to be served by a perception
of the broader national interest and that we had, certainly by
by internation standards, succeeded admirably by pursuing that
approach. That we had within that framework indicated not merely
a disposition but an intention in practice to go about a review
of our own eeenomic S~ U: ULu. w Lw zunkn It wgire relevant to current
circumstances. I instanced what we had done in the steel and the
automobile industry to make those industries more efficient or
export oriented and ultimately more exposed to international
competition. Not only had we adopted these approaches within
Australia but that we had in our relations with the countries of
of our region in a way in which we were gradually seeking to come
together in that area, had also sought to see the interests of
Australia in the context of that broader international com~ munity
of which we are part. And it was in that sense that I said to the
Commission, therefore, that we came with clean hands as it were
in asking them to adopt the samie approat1a that there was we
believe~ d, whR~ n vipwed in that perpective. a mutuality of interest
between Australia and thc community in that therd was no doubt that
the pursuit of the CAP policies by the Commission through time and
presently was such as not merely to operate against the interests
FROMl 32 2 513012 6 5'. e 234
P. M. cont...: of Australia, but also against the real1 interests
of the community itself here. Because, of course, the pursuit of
these policies which had transformed the Community from one which
was seeking to achieve merely self-sufficiency into a major
world exporter of primary products, had consistently and increasingly been
involved in misallocation of resources within the Community, it had
llleatiL hiyhi~ r fuud prices, it had meant higher wage costs and it
involved a significant increase in rigidities within the Community
and therefore reduced the capacity of the Community to make those
adjustments which were necessary if the European Community was
going to be able properly to achieve the greatest degree of
economic growth in competitive world situations.
Now it was within that conceptual framework, if you like, that we
put our point of view to the Commission about the adverse impact
* upon Australia of the operation of the CAP. We said to them
that we were not here to merely beat drums, make empty threats
and carry on in a confrontationist way but that we did have very
strong concerns generally and in regard to specific commodities.
I addressed those specific commodities and our concerns of the
way in which through the operation of the CAP Australia had not
merely, as it had in the first stage, lost traditional markets
here, but as the Community had become a substantial exporter we
had lost traditional markets. For instance in beef we've lost
markets in the Middle East and North Africa and reduced markats
in Canada. And if I may go there from that point directly to one
area that we pressed strongly with them, that there was very
substantial concern within the Australian rural community that
we faced problems in regard to the Pacific Basin region for our
beef exports in that that region, which markets had been developed
by the industry to compensate for the loss of the previously
traditional markets in U. K. and Europe. And so we pressed with
the Commission that there should be not merely a confirmation but
a strengthening of indications that had previously been given about
a preparedness on their part to address this issue. And in the
result I believe I'm able to say that the Commission in the
detailed discussions now that Mr Kerin will be conducting with
Commissioner Andriessen tomorrow, that I believe that out of those
discussions now will come a firming up of the position by t" he
Commission to the effect that the Commission will be expressing a
position of having no intention presently or in foreseeable
circumstances of applying export funds or introducing beef at
discounted prices in those markets to which I've referred the
Pacific Basin region. Now we believe from the discussions we've
had today that we'll get that sort of indication, but Mr Kerin
will bc taking those discussions now in more detailed form with
the Commissioner tomorrow. But I am confident, therefore, that
as a result of our discussions the apprehension that had been
felt by the rural community and by the National Farmers Federation
in the talks we'd had as recently as yesterday here, that we will
be in a position to achieve some reassurance there. I say no
more about beef other than to express as I say that optimistic
view. 3
$ 5.32.04 23941
3.
P. M. cont...: In regard to dairy products we observed again
the adverse impact that has been felt by our industry as a result
of the massive export surpluses that have been generated as a
result of the CAP. And in particular in regard to cheese I
indicated to the Commission that our import regime for cheese will
have to hp reviewed because of the significant increase in
cheese imports that have occurred particularly since the
understanding was reached with the Community in November of
1983, that even since that time there's been significant increases
in Cheese imports into Australia, I pointed out that our import
regime for cheese will have to be reviewed in these circumstances
pointing out to them that any changes, however, that we'll make
will be fully consistent with our international obligations and
MTN commitments.
In regard to sugar I again pointed out to the Commission the
significantly adverse impact upon of Australia of developments
in the international sugar market. You know that there's been
this dramatic reduction in price from about 40 cents a pound
back in 1980 down to a situation more recently, it's been
down in the order of 5 cents a pound. This has created very
significant problems. And the position following the failure
last year to achieve an international sugar agreement following
the discussions in Geneva at which John was present has meant
for our industry, which is we assert the most efficient in the
world, very substantial problems. You will recall that in the
election campaign I undertook to the representatives of the
canegrowers that I would seek to use my influence to see if
we could get some international meeting to try and get a degree
of co-operation. And I put to the Commission that fo llowing'
discussions that had been taking place amongst representatives
of producers that Australia is considering an initiative whereby
it would convene a meeting of the major producers that's
Australia, Brazil, Cuba and the European Community. And I put
( 9 to the Commission that it would be helpful if they could adopt
the attitude in respect of their own producers as saying that
. they saw such an approach has being a helpful and constructive
measure. And I hope that that will be the case, Let me also
say that I put to the Commission that their sugar regime runs
until 1986 and indicated that our producers would seek to have
the opportunity to present their views to the Commission during
the course of that review and I hope that as a result of the
discussions that we've had that the Australian producers will
take that opportunity.
In regard to cereals we again put the view that again our
industry had been substantially disadvantaged by the fact that
the European Community had become a very substantial exporter
in this area. The quite remarkable position has been achieved
that last year the European Community actually as a result of
its policies had a higher harvest of wheat than the United States.
31ifCoIS
FROM 32 2 5130126' 85.02. e4 23* 42
4.
P. M. cont I particularly also went to the area of barley
and I pointed out to the Commission that EC subsidised barley
exports had reduced the world price for feed barley by 13%
and that if the EC were to continue to export barley subsidised
malt during 1985 into the Pacific region then Australia would
stand to lose 110,000 tons in sales representing some
of its traditional market.
Finally in regard to wine we put the view to the Commission that
there was a lack of reciprocity in the trading relationship
in wine between Australia and the Community in that we in
Australia accepted the. Cormmunity standards in regard to wine
and didn't seek to impose the artificial barriers in that
respect, but there was not reciprocity in that area as far
as Europe was concerned. And we put to them strongly that they
should be prepared to accept our standards and that again
will be a matter that John Kerin will be discussing with them.
So ladies and gentlemen I apologise that it's taken some time
but I hope I've now covered the areas that we discussed both
in general conceptual terms and in regard to specific commodities
with the Community. And I believe that as a result of the
discussions certainly the relationship between Australia and
the community is now on a basis where rational discussion can
be held. We're not in the business of confrontational rhetoric
but we are in the business of putting forcefully to the
Community the legitimate concerns of our rural community and,
as I say, I believe that-in the discussions which have now
been set up following our meeting today that we can hope for
-some fleshing out of those areas of assistance to which
I have referred.
JOURNALIST: Prime M~ inister given the background of the new
members of the Commission that there was some hope on the
Australian side that there would be a degree of what Hr Kerin
characterised yesterday as ' economic sanity' do you think
that's what they've got
Well let me say that I think that the composition of
the new Commission is such as that the new Commissioners do
bring to their very substantial and difficult task a degree
of expertise which is welcome and it was certainly the case
that we were able today to have the discussion which was
an intelligent and rational discussion. I think they certainly
understand the dimensions of the problems confronting Australian
rural producers and they accepted, I believe, the rationality
of the case that we put. I mean having said that one is forced
to say that they in turn are faced with a situation which is
not one to which economic rationality is the only consideration
which we've brought to bear. They have their own very substantial
rural conatituencies. But in that respect may I say that I
pointed out to them we understand the nature of the political
pressures that can be brought to bear by rural interests and
the legitimate concerns of producers that they are not going
to be disadvantaged. But what we pointed out was the economic
fact that the way in which the CAP was operating was not
efficient in terms of meeting those needs of farmers. Because
the facts are that 8% of the benefit of the CAP progam goes.
to about 20% of their producers their most efficient producers.
FROM 32 2 5130126' a5.02.04 23144
P. M. cont...: So if you like as a social instrument it is
inefficient and so you're not only getting inefficiencies in
terms of equity but, as I said at the opening Of my statement,
you're also getting very substantial economic efficiences and
rigidities within the. European Economic Community which mean
that their capacity to have an economic structure which will
make them most efficient in competition in other areas is to
that extent reduced. Now those arguments, I think, are well
understood. Now the extent to which they can move to give
effect to the arguments is a matter of time. But I believe
there is a commitment and an intention on the part of this
new Commission to address those issues with a degree of
realism. JOURNALIST: On sugar did the EC actually respond that they
would attend the proposed meeting in Australi1a.
Well this is not a meeting of Governments or Government
institutions. It's proposed as a meeting or producers and
representatives of producers. And really what I put to the
Commission was that they should allow their producers to
see from the Commission's point of view thM-. they would regard
that as an initiative which could be useful.
JOURNALIST: On the beef, did they actually promise they would
not trade unfairly in Asia, or did they promise to talk about it.
What we have reached is a posiLJlOA wheru X believe I'm
-able to say what I did about the sort of thing they'll bay.
The actual specifics of the formulation are to be finalised
by Mr iKerin tomorrow. But I feel able on the basis of today's
discussions to express confidence that there will be a view
emerging following today and the detailed discussions tomorrow
that there will be a position emerging in which they will be
saying that they have no current intention or in the foreseeable
. future of operating to our disadvantage in that region by
the use of subsidised exports.
JOURNALISTt What was it they said today that leads you to
expect that and who was it who said it to you.
P. M. t Well I had first of all discussions with the President
and then these points were put to the Commission in full today.
And concurrently there have been discussions at the official
level. And it's out of all of those discussions that have been
going on that I believe tomorrow should see that sort of position
emerging. JOURNALIST: Are you looking at a watertight guarantee that the
Europeans are not going to dump their beef in the Pacific Basin.
FROM 32 2 5130126' 85.82.04 23: 45
6.
P. M. t Yes, that they; will be giving us an undertaking that they
will not be dumping and t-hat they will give us that undertaking
now and into the foreseeable future. And I would hope that we
may also be able to achieve a posit-ion that in addition to that
sort of undertaking for the present and foreseeable future that they
may be prepared to go to the point of saying that should there be
beyond that foreseeable future any contemplation of change that
no such change would take place other than at the Commission level.
In other words it's not something that could be affected
subsequently by bureaucratic decisions.
JOURNALISTt So you think you're leaving Brussels with a-good result
in other words. Is that the way you would look at it.
Well I want to be careful about not raising undue
expectations. I hope, I think I've put it fairly, I believe that
as a result of the work we've done which is to be finalised by
John tomorrow, I think that sort of undertaking that I've indicated
should be forthcoming. If iit i6 Lhat certainly meets the hopes
that were expressed to us by the representatives of the rural
community.
JOURNALIST: So if you get those guarantees what do they -want in
return. Well that's matter that will be part of the discussions
tomorrow. if we can get satisfaction in that respect then I
believe it would be possible for John to diocuee with them whether
there would be a pursuing of the Article 23 matters under GATT.
JOURN~ ALIST: Did you get any undertakings on the barley and malt?
All that was done there mike was to put the details to
them of what's happened adversely in the reduction as I said of
the 13% in price and to indicate the apprehension~ that we've got..
I received at that stage no undertakings from them but merely there
was an acceptance by them that they took aboard what we said and it
would be a matter pursued in discussion tomorrow by Mr Kerin.
JOURNALIST+ Did that also apply to eugar. Was that the situation
Wall I t%-hink with sugar what wn've achieved is this and
again I don't want to overstate the position but I believe
that we have reached a position with the Cornmunity that I think
they would mnake it clear to the ' European producers that they
ooulId see some merit in the meeting of the sort that I have
indicated. And if we can do that, well then we will have Itaken
that part of fulfilling the undertaking which I gave to producers.
Because there is absolutely no doubt that the present position is
intolerable where the Australian industry, as I say we believe
we're the most efficient sugar producer in ie world, is because
of the absence of an international sugar agreement emerging from
last year's discussion, are operating in this position where they
are getting suc~ h a pitiful return below cost of production returnfor
their product. And all we can say, and I don't want to overstate
it, but what the Australian producers have said is well, let's at
least try and get a meeting of the major producers to see whether
there is a possibility of doing something about getting a more
rational international marketing position. And I think as a result
of the discussions today Australia will be in a position where o7
FROM 32 2 5130126185.02.04 23: 47
P. M. cont it will be able to convene that meeting and it
will] be able to be convened in the circumstance where at least
the European Commission would not be indicating to the European
producers that they were averse to that meeting taking place.
JOLJRNALISTt Did you seek an assurance that they wouldn't be
dumping any more butter below GATT prices.
we. Li wnaL wu yuL Lu LUzisu w. yandral eoLir of tho
problems that have been created for the dairy indujtry generally
as a result of their actions. The officials, of course, have
made clear the adverse impact that we saw that resulted from the
decisions they had made-in--regard to sales to the Soviet Union
in defiance of the international dairying arrangement. But the
specific aspect of the dairy industry that we put to them which
represented our own conviction and certainly followed the
discussions that we'd had with the representatives of the
National Farmers Federation we put to them quite clearly that
we could not and would not tolerate a position where subsidised
dairy products were being brought into Australia, taking up a
very significant share of th~ e Australian market and m~ ade it
quite clear that in those circumstances we would be reviewing our
import regime to try and meet that situation.
JOURNALISTt Mr Kerin given that the EEC broke the international
dairy agreement and given that they welched on agreements with
Australia over cheese imports, why would you have any confidence
whatsoever that they would abide by any undertaking given to
Australia over beef.
KERIN: I'd just like to make the point that there is a new
Commission. We've been the first country to come here with the
new Commission. It's a chance to restate again how we expect
the FC to behave in the international commodity arena and I don't
think there was any, well they certainly didn't equivocate today
from that point of view. And although they didn't say we're sorry
chaps, or anything, we're dealing with a whole new Commission.
The Prime Minister made the case in the'strongest possible terms.
H~ e mapped out the high ground on the specific commodity matters
that VIl be talking about tomorrow with Mr Andriessen.
JOURNALISTt What did they reply on the cheese matter.
Well they took note of what I said and I indicated t hat
Mr Kerin would be spelling that out and the clear implications
of it tomorrow. And there was no equivocation about our position
on that.
JOURNALIST: I get the impression, Prime Minister, that you've
been pleasantly surprised with the attitude of the Europeans.
P. M: Let's be clear about this. I don't want to leave the
impression that we've just come here and put what I believe has,
of course, been a totally rational, legitimate and well-founded case.
0/ q~/
FROM 32 2 5130126' 85-02.04 23: 48
FROMI 32 2 5130126 -' 95.02.04 275: 45.
* in the total1 level of C0RT=. 1nty eXport operations anid the 8
* two-way trade betwe-en us Australia represents a miiiscule prpton fSar
of their operations.
cont...: That we've dne. I beliE-ve ielve done it
effectively. But I hope that the answers I gave before did not
overstate the way our expectations can be. I believe that we've
got legitimate expectations of a satisfactory response in the
area of beef in the Pacific market. I think that is a legitimate
expectation of our talks. In the area of sugar I've set out
what I believe we've achieved there and I don't want to overstate
that that is that we ought to be able now to have this
international producers meeting that we'd seek to convene without
opposition from the Comm~ ission and that there will be an
opportunity for our producers to have an input if they wish to
consideration by the Commission of the sugar regime which expires
4 in 1986. Those are specifics. I hope also that in regard
to wine that they will see, I think, the unarguable case that
we've put there. I mean we accept their standards, they should
accept ours. And I am hopeful that in the discussions something
will come of that. So if you add those things together you can
point to achievements and pluses. But having said that you are
still faced with a total regime which creates very significant
problems because we have the basic and unarguable fact that you
have this very substantial Community with fertile soil and
political imperatives which has pursued policies leading to
Significant oversupplies in all our major rural areas of
production other than wool. Now that's not something that I
want to leave the impression that we'vye solved our basic problem.
I think the fair statement is that in realistically achievable
areas we have got some runs on the board which will be of benefit
to sections of our industry.
JOUIRNALIST: In terms of getting th'qm to accept your economically
rational arguments is the reaction better than you expected or
as you expected or not
Oh, I think yes they understood the arguments that we
were putting as indeed as intelligent men they had to. Arnd the
Al arguments and the case, the exposition, in incontravertible. I
. think I indicated in answer to a previous qruestion that
unfortunately what we're faced with is a consideration not only
of the application of economic rationality, but of certain internal
political imperatives which are not easily overcome.
' IJOLJP1ZhLST: 14elU. how long would Australia suf fer such a drain on the
balance of payments before the Government responded with some
sort of overt retaliation.
Well one has to be realistic in this question of retaliation.
I think there is nothing more tutilt:, di' d r seek of couroo
to speak for the National Farmers Federation. They have their
very articulate and able spokesman available to speak to you but
I don'I t believe. that they would take the view that anything is achieved by
eq: ty gestures and threats of retaliation. We have to accept the fact that
And within that framrework, therefore, threats can be somewhat
empty. What we have attempted to do is to put to the community
the views of our Government and the views of the Australian
industry. And may I say, I notice the representatives of the
National Farmers Federp&'% ion are present here,. that we have been
assisted by the way in which both in Australia and here as
recently as yesterday, the representatives of the rural
community put their case to us. And we weren't faced with a / 9
FROM 2 51Z0112E. 8.2e 3~
' f/ F~ 9.
P. M. cont situation of being asked to make empty threats
because where can you get in doing that. But we believe that
we are able to say to this Community which is conceptually founded
upon the proposition of principles of liberal free trade that
they should understand not only in our interests, but in their
own, that ultimately our mutual interests are only best served
by the application of the principles that we are putting. And
we believe that we've got to continue to put that argument..
JOURNALIST: Mr H~ awke if you don't get the assurances that you
want and you don't take out trade retaliation, will you come back
and make the same arguments again.
Well let me pick up that point in this direct and relevant
way in the latter part of the discussions the President,
Monsieur Delors, indicated to me that they had appreciated the
breadth and detail of the exposition that I put. And they expressed
the view that they would want to see continuing discussions between
us. And so I think we have established a framework now quite
clearly where we will be able to continue discussions in the way
that we put them. 1 don't expect, and I don't imagine, that
Australian rural interests believe that you're going to resolve
these problems in one day or two days. We have got certain
advances I believe. I've outlined them, I don't want to go
into those again. But in addition to getting those advances which
I hope will be of some comfort to our rural industry and to
Australia as a whole, inL addition to that I repeat, I believe
we have established a framework wherein we'll be able to continue
to-press our point of view.
JOURNALIST: Was the ban on uranium exports to France raised
Yes, it was raised. We didn't only deal with agricultural
matters, but with a whole range of bilateral relations. That
was raised. I made it clear to the Commurnity that that decis ion
had been made firmly by the Australian Government for good
internal reasons. That it applied to F~ rance and I made it clear
that it would be quite improper for the commission to try and
create, to erect an implication, of Australia as an unreliable
supplier on the basis of that decision. we're specific for
specific reasons applying to one country, and one country only
as a community.
JOURNALIST: Did they ask you to lift the ban.
No, they weren't gauche enough to do that or even droit enough.
JOURNALIST: the ban as being for good political domestic
reasons. Did you explain it was also for international political
reasons. Well we made the decision as a Government because of
our perception as a Government that that was the appropriate
course of action. It is a course of action which I believe would
receive the support of othier countries in our region. But we
made that decision autonomously and made it in the context of
our broader approach on these matters.
0 W 17 1! 1" I'll 85.02.04 23: 51
A
JOURNALISTt In what cc., ntext did they raise the uranium
Simply because we were, as I say, in addition to talving
about agricultural matters, we also talked about the whole
range of bilateral trading. Now in that the question of energy
resources came up. You will appreciate that the Australian coal
ñ ndustry has made substantial advances recently. And during
1984 in sales to Europe and so the whole question of both
Australia as a supplier of energy resources and also of investment
by the Community in Australia was a matter of discussion. So
let me make it quite clear that the overwhelming proportion of
our discussion was in the area of agricultural products. But
we had an obligation to address these other issues.
JOURNALIST: Did they say they raised it because France wanted
them to. They didn't say they raised it because France wanted
them to. But in the course of their exposition on this subject
they did make the point that what happened to one member of the
Community was regarded as significant for other members of the
Community. And it was in that context that I made the point
that I've made to you that it would be totally improper for the
Commission to erect upon the basis of that decision some
proposition about Australia being an unreliable supplier in the
general sense.
JOURNALIST: They accepted your explanation.
I believe they did.
ENDS. I
FROM 32 Z 5130126185.02A4 23: 52