THE NEW ZEALAND DAIRY BOARD:
EXPOSED AS ONE OF THE WORLD'S TRUE EXPORT MONOPOLIES
A number of recent developments have reaffirmed that the New Zealand
Dairy Board (NZDB), notwithstanding its inconsistent arguments to the contrary,
is a true export monopoly operating under the guise of a state trading
enterprises.
- The New Zealand Dairy Board goes to great lengths to disguise its
export monopoly status. In a March, 1996 submission to the U.S. Department
of Agriculture (USDA), counsel for the NZDB argued that the Board is merely
a group of farmers banding together to sell dairy products, when he submitted
that --
"the Board is a commercial organization operating as an independent
entity, funded entirely by the farmer owners without taxpayer assistance.
It is the industry's choice, which is to say the desire of the New Zealand
dairy farmers, to structure their business in this way, with the common
objective of maximizing returns from exporting marketings."
Almost simultaneously, NZDB counsel also argued in a Federal court in
New York that New Zealand law, not the desire of its farmers, effectively
compels the NZDB to act as a monopoly. In October, 1996 the court noted
that the NZDB's arguments before the court were "inconsistent"
with its statements to the USDA.
- USDA has correctly identified the NZDB as an anti-competitive
export monopoly. Fortunately, USDA has not been taken in by the NZDB's
use of inconsistent and misleading statements denying its monopoly status.
In fact, USDA's Foreign Agricultural Service has correctly stated that
the NZDB is an export monopoly that "remains an unreformed and anticompetitive
entity".
- Even China is moving to liberate its export monopolies. According
to the March 4, 1997 Journal of Commerce, China is expected to announce
the proposed liberalization of its import and export systems to allow foreign
companies to export goods from China directly, without being required to
work through China's state trading enterprises. If this proposal is implemented,
China's export markets will be more open and competitive than the export
market for New Zealand dairy products!
Disciplining State Trading Enterprise activities remains a key U.S.
trade policy goal. Representatives of the Office of the U.S. Trade
Representative, USDA, and a broad array of agricultural organizations raised
concerns regarding the operations of state trading enterprises at the World
Trading Organization Ministerial meeting last December. All of these U.S.
representatives agree that the Uruguay Round reforms did not adequately
address the need for disciplining the activities of state trading enterprises,
such as the New Zealand Dairy Board. Imposing disciplines on such enterprises
remains a key trade policy goal for United States agricultural producers
and exporters, as well as the United States Government.
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