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Wednesday, 17 April 1985
Page: 1138

Senator VIGOR —I address my question to the Minister representing the Minister for Trade. Given that the world was led into the Great Depression after Congress members Smoot and Hawley persuaded the United States Government to implement a highly protective import surcharge in 1930, is the Minister aware of recent threats from the United States Congress to impose import surcharges on all foreign products or, selectively, on the products of those countries with whom it has the biggest trade deficits, such as Japan? Will the Australian Government make it clear to the Reagan Administration that it does not want to be forced to surrender its markets to the United States just because that country has the ability to bully Japan into buying United States goods irrespective of quality, price or the preference of Japanese consumers? Does the Minister agree that any surcharges or quotas imposed by the United States could unleash a trade war and a massive depression, and that President Reagan must be persuaded not to destroy the world economy in the name of buttressing the over-valued United States dollar?

Senator BUTTON —I am not aware of the invaluable work of Congressmen Smoot and Hawley in the 1930s, but I am not asked to answer for them and I am glad for that. The question which Senator Vigor asked me is really in three parts. First of all it refers to threats from the United States Congress to impose import surcharges on foreign products. Yes, I am aware of those threats. Essentially, although it has repercussions for Australia, to which I will refer in a moment, it is a matter for the United States and Japan. It is not my role or function to comment on the particular or peculiar style with which they carry out any trade negotiation or bargaining. I do not think that anything I say would help in that process.

Senator Missen —Don't be too modest.

Senator BUTTON —It is not I who is being modest. I think it is a case of Australia being modest. That is the point I am making which is a different one, not a smart one. The second part of the question referred to the Australian Government's role in making its view clear to the Reagan Administration about the implications for Australia of the first part of Senator Vigor's question. I am asked: Will we make representations to the United States Government on these issues? We have, in respect of a number of matters. Particularly late last year and early this year we had a long series of representations to the United States Government about the export of Australian steel to the West Coast of the United States. In respect of a wide range of other issues and generally, representations have been made and are continuing to be made.

The third part of the question asked what one might see as the more horrendous repercussions of the actions which are being mooted in certain sections of the United States Congress regarding trade policy. I agree with the implications of Senator Vigor that, if those attitudes were to prevail in the United States Congress and the sort of action which he hinted at took place, a great deal of damage would be done to the world trading environment. However, I make it quite clear that this Government and many governments around the world have been careful to try to explain their views on that matter to the United States Government. We have, in a series of public announcements as a result of discussions in preparation for the multilateral trade negotiations, indicated our position as a government in relation to those issues.

In particular this Government has taken initiatives in this region to see that countries in this region have a collective approach as far as possible for the next round of MTN. I must say that in the course of those discussions the attitude advanced by United States officials has not been the same as the attitude advanced by the more backwoods section of Congress on this matter. So that it itself is encouraging.

Let me make the point that, just as in Australia, there are differences of views on these issues; there are strongly held differences of views in the United States, and one would hope that the saner view would ultimately prevail.

Senator VIGOR —I ask a supplementary question. In the case of the United States not heeding our warnings, what type of action would the Government be able to take to defend us against such a trade war?

Senator BUTTON —I do not know. I suppose we could send a gun boat or something like that, but I do not think that would impress the United States very much. Insofar as a range of possible actions we could take is concerned, I cannot for a moment imagine that they would be effective. I will direct that part of the honourable senator's question to the Minister for Trade. However, essentially, as I have indicated in answers to a number of questions in the Senate today, this Government takes the view that persuasion is the best method of defence.