Fed: Cabinet of 1978 considered beef for Alfas deal
By Max Blenkin01 Jan 2009 12:01 AM
EDS: Embargoed until 0001 (AEDT), January 1, 2009
CANBERRA, Jan 1 AAP - Of all the weird trade deals in Australia's long mercantile history, probably none came close to the 1978 scheme to swap 7,000 tonnes of Aussie beef and offal for 2,000 Alfa Romeo cars.
Cabinet papers for 1978 - released by the national Archives of Australia - reveal the government of Malcolm Fraser seriously considered going ahead with the plan.
Under the deal, Alfa Romeo was prepared to buy 7,000 tonnes of beef and offal - it specified precisely what type and quantities - in return for the allocation of a quota to import cars to Australia of equivalent value to the meat.
The quota was apparently calculated as 2,000 cars, which would have been imported in addition to the normal Alfa import entitlement.
The plan was considered in an era when the now defunct European Economic Community (EEC) jealously guarded against imports of Australian primary products, while Australia imposed car import quotas in order to protect local car makers against cheap imports.
The deal was regarded as an imaginative way to bypass EEC trade barriers.
In his submission to cabinet, the minister for special trade representations, Ransley Garland, said the proposal came from the Italian embassy in Canberra, with Alfa Romeo in Italy subsequently confirming it was prepared to purchase Australian beef to be served in factory canteens.
Alfa's parent company, the state-owned Institute for Industrial Reconstruction (IRR), would work through an Italian importer with access to part of Italy's share of the GATT (General Agreement on Tariffs and Trade) levy-free quota.
The importer usually sourced beef in Argentina but IRR could exert its influence as a large customer for it to buy Australian.
Mr Garland said it was envisaged as a one-off deal.
He said the GATT system worked against Australia, which made negligible exports to EEC nations, and hence, had no established connections with meat importers.
Mr Garland said the proposal could present an opportunity to break into the continental community market for significant beef sales.
However, he had reservations about Australia becoming involved in the business of trading car quotas, and was worried about whether such an arrangement could be confined to the EEC.
Of concern was whether other big buyers of Australian beef, such as the USSR or even Japan, would be stimulated into seeking enlarged car import quotas.
Mr Garland recommended that cabinet endorse further investigations, but as it turned out, the proposal came to nought.
Had the scheme proceeded, Italian car workers might have got the better end of the deal.
Despite producing vehicles of imaginative design and sparkling performance, Alfa Romeo also had a well established reputation for industrial unrest, marginal quality control and spectacular rust.
