FORPRESS 19 JANUARY 1978
EUROPEAN RESTRAINTS ON STEEL IMPORTS
The Prime Minister said today that the European Community was
again pursuing courses in its trade relations which were inimical
to the free flow of world trade. Mr Fraser said that his
Government's view of the Common Agricultural Policy was well known.
I t would continue to argue for modifications of that policy.
Further, it would continue to argue for modifications in the
Community's policies of subsidising the export of surplus agficultural
products, produced as a result of inflated domestic prices at the
expense of other traditional markets such as Australia.
During his visit last June, the Prime Minister said he had
expressed concern that there were signs that more of these
agriculture-type policies were starting to appear in other areas of
EEC activity.
Australian steel exports had been threatened last June and the EEC
was now seeking to apply restraints on steel exports to the
European Community on a very wide scale.*
Exporters to Europe would virtually be forced to seek bilateral
agreements with the Community based on minimum prices and maximum
quantities or else face countervailing duties which would probably
exclude them from exporting to Europe altogether.
The Prime Minister said he found it dtfficult to understand the
Community's unilateral measures, particularly as the Conmunity-s
steel industry had consistently supplied around 90 percent
of its own market.
It also exported about twice as much as it imported.
Published statistics clearly-showed that in the fixst njne zonth$. of
1977, while imports of steel products into the Community rose by-
2 percent compared with the same period in 1976, exports roeE by
29 percent. In this situation, the Community could hardly
claim that imports were causing major damage to its own industries.
He said it looked as though the European Community was seeking
to make the iron and steel industries in countries such as Australia
which were themselves facing problems as acute as those of the EEC,
carry an unfair share of the burden of the recession in the steel
industry in Europe. / 2
The across-the-board-measures introduced by the European Community
appeared to have scant regard for the fact that the recession in the
steel industry extended beyond the bounds of Europe. It was
a world-wide recession.
The Prime Minister said that the measures, if applied to Australia,
could have a very adverse effect on our exports to the EEC and
consequently on production and employment levels in Australia's iron
and steel industry.
Total Australian exports of finished and semi-finished steel
products subject to the EEC measures of around $ A45-50 inillion
per annum could be placed as risk.
The Prime Minister noted that imports of steel from Australia
consitituted only a small proportion of Community-consumption of
steel, somewhat less than one-half of one percent, and a high
proportion of this was feedstock or~ semi-finished steel for the
Community. Very little was in finished forms which accounted for over
percent of total steel imports into the EEC in 19.76-77.
Australia exported less than $ A 1 million of finished steel products
to the EEC in 1976-77, while Australia imported just over
$ A12 million of-these products from the Community, a net advantage
to the Community steel industry of around $ A 11 million.
The Prime Minister said that his own discussions in Europe had been
followed with very useful discussions betweenMr Howard, the
Commission and the members of the Community.
The next round of consultations would be undertaken by M~ r Garl~ and
the Minister for Special Trade Representations. Mr Garland s-tood
ready to visit the Commission at any time, but present advice was that
the Commission would not wish to resume discussions until after a
number of developments in the first quarter of 1978, including-the
French elections.
The Prime Minister said that in a lette r to' the President of the
Commission, Mr Jenkins, he said that it would be quite unreasonAble
for the Commission to seek to apply its current measures to Australia
pending those joint trade discussions. If there was a. need)
Mr Garland could visit Brussels at a moment's notice.'
The Prime Minister went on to say that the essential aim of the
continuing discussions between Australia and. the* Commission was to
find ways in which the trading relationship between Australia And the
European Community could be placed on a. more equitable and -mutually
beneficial basis.
He said that it would be iflost undesirable if restraints were placed
on Australia's exports of steel in the midst of continuing
discussions as this could jeopardise the common objective of
improving trade relationships between Australia and the EEC.