The United States-New Zealand Lamb Dispute

By Sato, Yoichiro | New Zealand International Review, November 2000 | Go to article overview

The United States-New Zealand Lamb Dispute


Sato, Yoichiro, New Zealand International Review


Yoichiro Sato provides a political interpretation of a complex trade problem which arose in 1998-99.

The temporary tariff on lamb imports from New Zealand and Australia imposed by the United States in July 1999 has angered New Zealand farmers, the public and free trade advocates in general. Among the New Zealand academics and media commentators, criticism of US hypocrisy for advocating free trade but acting in a protectionist manner seems predominant. However, my preliminary research into printed and Internet material on this case has found evidence that qualifies such a cynical and simple assessment of US trade policymaking. This article reports these new empirical findings and explains the 1998-99 United States-New Zealand lamb trade dispute through an alternative theoretical framework, one acknowledging complex domestic political processes.

For those who understand American domestic politics, the making of US trade policies is always an interesting subject. Section 201 of the US Trade Act of 1974 specifies US procedures for cases of injury to domestic industries due to either dumping, foreign subsidies, or a drastic surge of imports. The lamb dispute was handled as a case in the last category. Comprehensive understanding of the lamb dispute requires careful observation of interest group politics, bureaucratic politics, Congress-President interaction, and issue linkages, as well as examination of the various interim policy alternatives that shape the final policy outcomes. While no one denies that politics has a role to play in this process, how much politics is actually involved is a question not usually assessed.

Since the issue is a recent and ongoing one, little study has yet been done on it. Steve Hoadley has recently published an interim account in his New Zealand United States Relations: Friends No Longer Allies. He reviews the American Sheep Industry Association (ASI)'s petitioning of the US International Trade Commission (ITC), discussions between relevant departments of the US administration, and an issue linkage with the APEC meeting. While his description gives useful insight into the US domestic process, he does not go deeply into US institutions or policy demands, options, and outcomes. More is needed to support analytical attempts by others.

Central role

Central to the dispute was the US International Trade Commission's role. The ITC's status as an `independent' agency masks the extent of its politicisation in the Section 201 cases. Despite the fairly bureaucratised ITC procedure, determination of when an `import surge' started, what should be the `normal' level of imports, how much and what type of protection is needed, and for how long, are all questions sensitive to political influence. In the 1998-99 lamb dispute case, the important questions were not merely about whether the imports from Australia and New Zealand caused an injury to the domestic sheep farmers, or what were the appropriate method and levels of protection. The dispute was also about how effectively to monitor the imports, and how to differentiate the imports from the domestically grown lamb.

The categorisation of lamb products by the US Customs Service was crude, and accurately capturing the import prices for different product categories of lamb was impossible. The ASI demanded that US importers of lamb voluntarily disclose their detailed import prices to the Department of Agriculture, but their demands were refused. Therefore, the ASI actively lobbied the US Congress as early as 1996 on these latter import-related issues.

Members of Congress in turn put pressure on the administration at key junctures of the lamb dispute. On the question of tariff imposition, the same set of politicians actively communicated with the ITC, the US Trade Representative, and the Agriculture Department at the request of the ASI members. The ASI was instructing its members on how to lobby their congressional members with point-by-point talk lines. …

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