990554 NZ Lamb Producers Expect Clinton to Limit Imports

Wellington, New Zealand - Domestic political pressures would probably force President Clinton to impose tariffs on New Zealand and Australian lamb imports, New Zealand's farmer-owned Meat Board said.

Chairman John Acland's comments came as the New Zealand government joined Australia in warning of possible World Trade Organization (WTO) action if tariffs were imposed.

Acland made the assessment after last-minute lobbying in Washington ahead of Clinton's decision on a recommendation from the U.S. International Trade Commission that he impose tariffs on the expanding lamb trade, worth $140 million last year.

Clinton has until June 5 to rule on proposed tariffs after American sheep farmers said a record 70 million pounds of unsubsidized Australasian lamb imported last year posed a threat to their future.

U.S. arguments in favor of worldwide trade liberalization were being eclipsed by the domestic issue of record trade deficits, Acland said.

“The political pressures inside the U.S.A. are causing him to react in this way,” Acland said. “The signs aren't too good.”

The lamb issue was seen in Washington as a precedent for larger trade battles with Japan and Europe, Acland added.

While maintaining there was no case to restrict New Zealand lamb imports, he said he hoped that Clinton would stick to the majority decision of the trade commission in March.

Under that decision, any additional lamb imported more than 78 million pounds a year would attract a 20 percent tariff -- sliding to zero over five years.

American sheep farmers had sought a sliding scale starting at initial 30 percent to 50 percent tariffs on all existing imports while two of the five commission members had recommended an initial 22 percent tariff on all imports.

“A decision by the president that is anything less than the majority (commission) recommendation would be totally unacceptable,” Acland said.

He will meet with New Zealand Prime Minister Jenny Shipley Tuesday to urge her to directly intervene.

“I would like her to pick up the phone and call the president,” Acland said.

Shipley said she had already written to Clinton and was poised to take WTO action if needed.

Australia Friday threatened to take an unfavorable decision to the WTO disputes procedure.

Shipley rejected media reports suggesting her government had been less public than Australia in its opposition to the tariffs for fear of losing U.S. support for New Zealand candidate Mike Moore as WTO director general.

The New Zealand meat industry maintains it is facing penalties for its efficiency. In New Zealand, 17,000 farmers raise 47 million sheep, compared with 77,000 American farmers raising seven million sheep.

An Australian and New Zealand offer of $1.5 million to help fund lamb marketing campaigns was rejected by U.S. industry representatives earlier this month.

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