Butter: a slippery issue in Wellington

Date: 18/06/1998

By Mark Turner

BRITTAN will also try to highlight the EU's maturing trade with New Zealand next week by closing a clutch of Mutual Recognition Agreements for industrial goods.

But his visit, immediately after his trip to Australia, will be dominated by a far more traditional business: butter.

Wellington and Brussels are currently at loggerheads over preferential New Zealand exports to the Union, originally granted after the UK joined the EEC in 1973.

The EU's Court of Auditors outraged New Zealand's dairy board in late April when it claimed that many of the country's butter exports over recent years did not qualify under the tariff regime, and alleged that 410 million ecu had been lost in unclaimed duties - 118 million ecu of which was recoverable.

According to the New Zealand dairy board, the ruling was a “lamentable piece of work”, based on a “very distorted and misleading presentation of the facts”.

Wellington diplomats also pointed out that New Zealand had won a recent legal challenge in the UK over whether 'spreadable butter' qualified under the quota regime, claiming that this further undermined the Court of Auditors' findings.

Given the complexities of the case, and a challenge by New Zealand in the World Trade Organisation, Brittan's officials are trying to calm the waters with some form of political declaration.

Few diplomats are predicting success. “I cannot say whether anything will come out of this,” said one.