The United States is New Zealand's fourth-largest export market for lamb RELATED VIDEO CNN's Mike Chinoy reports on the U.S. plan to impose tariffs on New Zealand lamb imports Windows Media 28K 80K

April 9, 1999
Web posted at: 11:54 a.m. EDT (1554 GMT)

AUCKLAND, New Zealand (CNN) -- A recommendation by the U.S. International Trade Commission to impose tariffs on lamb has set off alarm bells in New Zealand -- a country with 20 times as many sheep as people and an economy that relies heavily on lamb exports.

"We take it very seriously. We are a free trader. We seek to trade freely with others," said New Zealand Prime Minister Jenney Shipley, who traveled to Washington earlier this year to lobby for her country's sheep industry.

The U.S. market has grown rapidly in recent years and is now New Zealand's fourth largest for lamb exports.

For New Zealand sheep farmers, already facing a drought and a worldwide drop in wool prices, news of a lamb war with Washington hit hard.

"It will have a detrimental effect all right," said sheep farmer John Withell. "We've got enough troubles without that."

New Zealand may be facing a lamb war with Washington

New Zealand insists that its exports pose no threat to the American sheep industry.

"We don't believe it's a competition to the American market," Shipley said. "If we work together and collaborate, it can be to the mutual benefit of lamb producers in both areas rather than a risk to either."

But the International Trade Commission contends that a flood of cheap imported lamb could devastate the U.S. sheep industry, and recommends the introduction of significant tariffs, as well as quotas, for at least a four-year period.

Ironically, the dispute comes as New Zealand prepares to host U.S. President Bill Clinton and leaders from other nations in September at the annual Asia Pacific Economic Council summit, which invariably puts the promotion of free trade at the top of the agenda.

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