EMBARGO: 5;00 pm

53

P R I M E  MINISTER

FOR MEDIA SUNDAY 7 MARCH, 1982

ELECTORATE TALK

Australia has long been concerned at the almost total exclusion  of our farm products from European markets - markets which . were once major ones for our produce. We are equally disturbed  by the fact that European countries have also been exporting

increasing volumes of heavily subsidised agricultural produce  to third markets, in many cases markets which Australian . exporters have fought hard to build up after their virtual  exclusion from Europe, Ã¢ÂÂ  Ã¢ÂÂ

Obviously, these concerns were among the issues that we  discussed with the current President of the European Communities,  His Excellency, Mr. Gaston Thorn, during his recent visit to  Australia. It is a matter of regret to Australia that we

should have a continuing dispute with the European Community  over trading matters, for in many ways, in many fields, we  have relationships that are substantial and important. Of . course, this is not suprising. Australia and the European  Communities have a shared history and shared cultural values,

and we share a commitment to democracy as partners in the  Western alliance. .

In the past year a delegation of the European Parliament  visited Australia; Australia signed an important nuclear  safeguards agreement with EURATOM (that is the European  Community's Atomic Energy Commission); and Australia, and

the European Community have held talks at Ministerial, level  twice, in Brussels last December,  and here in Canberra last  week. Moreover, one of the main duties which President  Thorn performed during his visit was to open officially the

Canberra offices of the Commission's delegation to Australia.  Australia is one of the very few countries outside Europe .   where the Commission has established an office responsible  for relations with a single country, and its establishment  must surely contribute to better understanding and more

constructive relationships between Australia and Europe.

President Thorn and I spoke about the international political  situation as well as about economic matters. We discussed  Afghanistan and Poland and the important processes of consultation  among the Western allies following those events.  We agreed

that in the present international situation, the unity of  the Western alliance is more important than ever, and we  agreed that this means that special efforts need to be made  to avoid disputes among Western countries in all fields, and  to solve them if they arise. .

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Trade disputes in particular can place additional and unnecessary  strains on Western unity. In this regard there has been a recent  dispute in relation to Australia's import policies on footwear and  motor vehicles. The European Community has raised the matter with

the GATT in Geneva. However,, during President Thorn's visit it was  agreed that any action on this should be deferred pending further  study and consultations between the two sides,  Despite our broad  agreement on a wide range of issues, the fact remains that the  European Community's policies with respect to agricultural products  have cost o u r .farmers many hundreds of millions of dollars annually

in lost export earnings. Indeed, the Bureau of Agricultural Economics  has estimated that in respect of sugar alone, the trading, policies of  the European Communities have cost Australia $130 million annually in  lost export earnings during the past decade. These losses are a  direct consequence of the Community's common, agricultural policy  which provides assistance and protection to agricultural producers in

Europe. It has been estimated that assistance to those producers from  the European Community and from national governments, amounts to some  $30 billion annually, and imposes a huge burden on individuals1  in  Europe in the form of higher taxes, and higher food prices.

The common agricultural policy pursued by the European Community  involves setting very high domestic prices for the full range of  temperate agricultural products, and applying variable levies which  effectively prohibit imports except in rare cases where there are

shortfalls in domestic production. Not surprisingly,  these policies  have led1  to surplus production of many agricultural prodpcts by .  Europe's farmers, which are then exported, with the farmers receiving  further subsidies on these sales in the form of so-called export .

refunds.  So, not only are our farmers' products effectively excluded  from European, markets, they also face competition on unfair terms in -   other parts of the world market from European farmers who are being  subsidised for exporting.

I was very pleased that President Thorn assured m e  during our discussions,  of his own personal commitment to the goal of ending the subsidisation  of European farm exports to international markets, and, generally, of  reforming the common agricultural policy to put firm upper limits on  overall European farm production. On the other hand, the President  also emphasised that the economic situation in Europe at present is

rather bleak, with 10 millions unemployed and the likelihood that  this will rise to 11 or even 12 millions by later this year, levels  which could place considerable strains on political stability in  several European countries.  He stressed that these circumstances  mean that there are limited possibilities at present for the ten

sovereign European Governments to implement significant early structural  changes in industry or agriculture.

We understand Europe's problems.  We are not asking the European  Commission to force farmers out of farming. But we do ask that  policies of excessive protection and assistance be reformed, and that  change is not indefinitely deferred. Most importantly we ask that

the consequences of those policies are not exported outside Europe,  undermining the returns to efficient agricultural exporters in markets  around the world. I am pleased that the European Commission has now  at its helm a man committed to work towards, reforms in these areas.

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