405. Aide-Mémoire From the New Zealand Embassy1

AIDE-MEMOIRE

Further to the discussions last week between the Prime Minister of New Zealand and the President of the United States and the Secretary of Agriculture on the subject of United States meat imports,2 the New Zealand Embassy takes this opportunity of presenting the following views to the United States Administration.

While overall meat production in the United States is rising, there is already evidence of an inadequate supply of manufacturing quality beef. It has been estimated that United States production of this kind of meat will decline by over 150 million pounds from the 1968 level during 1969, 1970 and 1971. Simply to maintain supply to satisfy the consumer demand for the normal annual increase of 2-1/2 per cent would require additional imports of between 150 million and 200 million pounds a year. If, in those circumstances, imports are not allowed to supplement domestic production, the result will be severe price increases for meat products of a kind—hamburgers, frankfurters, etc.—particularly consumed by lower income families, or, conceivably, the rapid development of meat substitutes.

As we see it, there is no serious prospect of this deficit in supplies being filled by increased production in the United States. The dairy herd—a major domestic source of manufacturing quality meat in the past—continues to decline and milk cow numbers in the United States are at the lowest level since 1887. The production in the United States of other lean grass-fed beef comparable to the imported product also continues to decrease.

Exporting countries, however—New Zealand and Australia in particular—can supply increased quantities of manufacturing meat at reasonable prices, and access to the United States market for this product is vital to the future of our cattle industries.

In New Zealand’s view these considerations add up to a strong case for improved provision for imports of manufacturing quality meat into [Page 1008]the United States. There are several ways in which this could be achieved; for example, by repeal of the 1964 Meat Import Act. In the immediate situation there is scope for increasing the quantity of meat which could be imported under the voluntary restraint arrangement and the New Zealand authorities urge that this possibility be carefully examined.

The New Zealand authorities note that some livestock and meat prices (at wholesale level) have declined in recent weeks. Analysis of the situation shows that these reductions have been for cattle and meat of feeder and choice grades, i.e. high quality table meat. At the same time, however, prices for canner and cutter grade cattle, and boneless meat for manufacturing, have remained at or near earlier high levels, confirming continued high demand and a shortage of this type of meat.

Pending a decision on the level of imports to be permitted in 1969, the New Zealand authorities are most concerned that the Administration take every necessary step to ensure that other suppliers do not exceed the restraint levels of the voluntary arrangement. The Embassy recalls that in its Note of 27 December 1968, notifying its acceptance of the arrangement,3 the New Zealand Government set down its view that it would feel free to reassess its position should the situation develop where the intent of the restraint programs was being frustrated by the actions of any other exporting country.

The Embassy takes this opportunity also to underline the expectation of the New Zealand Government that the Administration will reallocate to the four countries which signed bilateral agreements on meat with the United States in 1964, the expected shortfall in supplies of meat from Canada. The New Zealand authorities are disturbed to learn of the view which has been expressed in some sections of the Administration that a net shortfall only will be reallocated. In New Zealand’s view such an approach would be entirely contrary to the understandings reached in December 1968. It would mean that supplying countries which did not choose, or were not able, to carry out their undertakings, would be placed in a favorable position of the disadvantage of other suppliers, including New Zealand, which were living up to the undertakings entered into. New Zealand regards the December commitment on shortfalls to mean any estimated shortfall from any supplier would be reallocated and it expects the Administration to reach its determination accordingly.

Looking ahead to 1970, the New Zealand authorities would hope that the United States Administration will see its way clear to finding ways of improving access to the market. In the absence of any other satisfactory [Page 1009]arrangement, New Zealand would prefer, however, to see continuation of the voluntary restraint arrangement with New Zealand’s share of the market fully reflecting our position as a traditional supplier. If, in any event, mandatory quotas came to be triggered or otherwise brought into effect, New Zealand is most concerned that full account be taken in the determination of market shares of its place in the market before the 1964 law was enacted.

  1. Source: National Archives, Nixon Presidential Materials, White House Central Files, Houthakker, Box 17, Meat: Australia/NZ. No classification marking. The aide-mémoire was presumably delivered to the Department of State. A covering note on New Zealand Embassy stationery reads: “With the compliments of the Minister (Commercial)” followed by Gordon R.J. Hope’s handwritten initials.
  2. Prime Minister Holyoake met with President Nixon, Kissinger, and Hardin from 10:47 a.m. to 12:08 p.m. on September 16, and was the guest of honor at a White House dinner that evening. (Ibid., President’s Daily Diary)
  3. Not further identified.