Smith Taking Trade Liberalisation Message To Europe

Trade and Agriculture Minister Lockwood Smith will this week take the Cairns Group's trade liberalisation message to the heart of the European Union, with visits to Hamburg, Vienna, Bonn and Brussels.

"My single most important message will be that subsidies and protectionism hurt the countries which maintain them, holding back economic growth and holding up unemployment," Dr Smith said. "Globally, they distort trade, damage the environment, reduce food security and create inequality by stopping farmers in developing countries from being able to fully compete on world markets."

Dr Smith's most important public engagement will be his keynote speech in Brussels on Thursday to a conference organised by respected European publication Agra Europe to consider reforms to the EU's Common Agricultural Policy.

"Because New Zealand reformed agricultural unilaterally in the mid-1980s, I can send a powerful message - based on experience not ideology - that the removal of subsidies and protection does not cause the extent of pain that many farmers in Europe fear and that it is ultimately beneficial to the economy concerned.

"In 1997, OECD countries transferred US$280 billion from their taxpayers and consumers to their farmers. That is about the same amount as the United States Federal Government spent in 1996 on health, education, the environment, international aid, NASA, community and regional development and military procurement combined.

"Not only could that money have been better invested elsewhere, it damages agriculture itself, and causes massive misallocation of private investment funds globally, costing economic growth and jobs.

"The CAP has been estimated to have cost between two and four million jobs in the EU when it had just 12 members.

"New Zealand and our friends in the Cairns Group say agricultural trade should be put on the basis as trade in anything else. In the lead up to the 1999 World Trade Organisation agriculture negotiations, we are campaigning for the abolition and prohibition of all export subsidies, clear disciplines for export credits, deep cuts in tariffs, and restrictions on domestic support so it must be targeted, transparent and fully decoupled so that it does not distort trade."

While in Brussels on Thursday, Dr Smith will also take his message direct to EU Agriculture Commissioner Franz Fischler and EU External Relations Commissioner Sir Leon Brittan. Meetings are also being sought with the EU Finance Commissioner and the Belgian Agriculture Minister.

Tomorrow, Dr Smith will meet in Hamburg with New Zealand exporters operating in Europe and with key German opinion-makers.

On Tuesday, he will be in Vienna to promote New Zealand as Austria's preferred partner in the Asia Pacific region, and to meet the Economics and Agriculture Ministers.

In Bonn on Wednesday, Dr Smith will meet with the German Agriculture Minister.

Dr Smith returns to New Zealand on Monday 27 April.