NZ and Australia mull WTO move

By Philippa Stevenson

The New Zealand and Australian governments are expected to consult closely this week on appeals to the World Trade Organisation over punishing US lamb tariffs.

Australia has already lodged a formal request in Geneva for WTO consultations after the US announced a three-year tariff and quota programme designed to help US lamb producers compete against Australian and New Zealand imports.

Outgoing Trade Minister Tim Fischer said on Friday that would trigger a meeting with the US trade representatives, which Australia wanted to be held this week.

A spokesman for Trade Minister Lockwood Smith said yesterday that Australia's initial move was designed to begin consultation over compensation for the US trade restrictions as provided under the WTO agreement on safeguards.

With Australia, New Zealand intended to go to the WTO for dispute settlement which was the highest order of action, he said.

Meanwhile, Australian Prime Minister John Howard, who has accused the US of hypocrisy for imposing the lamb tariffs while advocating free trade, has vowed to raise the lamb issue during talks this week with US President Bill Clinton in Washington.

The US has defended the tariffs as being consistent within WTO safeguard rules, which allow countries to grant short-term relief to industries that could otherwise be wiped out by foreign competition.

Australia has ruled out a trade war with the US, Mr Fischer saying such a move could cost Australia more than it was worth.

Australia's lamb exports to the US market are worth $A107 million ($137 million) a year and the Australian Sheepmeat Council has estimated the cost of the US tariffs at $A10 million to $A15 million a year. The New Zealand meat industry has estimated its cost over three years could reach $45 million on trade last year worth $130 million.