Sutton says US should 'take it on the chin'

By FRAN O'SULLIVAN in Washington DC

WASHINGTON - Trade Negotiations Minister Jim Sutton says the US should take a World Trade Organisation ruling in New Zealand's favour "on the chin."

The ruling - that US restrictions on Australasian lamb imports are illegal - was issued an hour before Mr Sutton met his counterpart, US Trade Representative Bob Zoellick.

It emphasised that the 1999 decision to impose additional tariffs and restrictive quotas on New Zealand and Australian lamb exports was based on inadequate data.

"It is inconceivable that a tiny country like New Zealand could successfully impose a solution on the world's biggest economy," said Mr Sutton in Washington yesterday. Mr Sutton said the US should "take it on the chin" and quickly lift the restrictions that have already cost New Zealand lamb producers an estimated $20 million.

"I have urged Mr Zoellick to make due haste to get this matter tidied away," said Mr Sutton. "His Administration had nothing to do with the safeguard."

"Naturally he was at least slightly disappointed and entirely understandably feels the need to take time to take advice."

The Zoellick camp believes it could be up to 60 days before the settlement procedures are resolved.

Under US law, Mr Zoellick's department has a 30-day period in which to analyse the WTO ruling and put options for compliance on the table - with a further 30-day period to agree process.

New Zealand and Australia took action under the World Trade Organisation's dispute settlement process in October 1999 - three months after the US imposed additional tariffs and quota restrictions on lamb meat exported from the two countries.

A WTO panel found the US restrictions were illegal. But the US appealed against the panel's decision.

The US had claimed the "safeguard" measures were necessary because imported lamb meat from New Zealand and Australia was threatening to cause serious injury to US sheep farmers and the lamb meat industry. Additional tariffs were imposed for three years (July 1999 - July 2002) with the possibility of an extension for a further five.

Mr Sutton said that if the decision had gone the other way, there would have been ongoing barriers raised and possibly increased. "It does give pause to those who would be tempted to undertake unwarranted safeguards - counterveiling duties or anti-dumping actions."