these countries access on favourable terms to the markets of the enlarge Community. Sugar producing countries in the developing Commonwealth have the assurance that within the framework of an association agreement or a trading arrangement it will be the Community's firm purpose to safeguard their interests.
100. Independent Asian Commonwealth countries will not only benefit from the generalised preference scheme of the enlarged Community, but have an undertaking that it will be the enlarged Community's continuing objective to expand and reinforce existing trade relations and that the Community will be ready to examine trade problems which might arise in future with a view to finding appropriate solutions.
101. For the more highly industrialised members of the Common- wealth-Australia and Canada-it has been recognised since 1967 that special arrangements of the kind negotiated for New Zealand and developing Commonwealth countries would be inappropriate. The Common External Tariff will be applied to their industrial exports into the United Kingdom gradually over the transitional period, and their exports of agricultural produce to the United Kingdom will also be affected by the arrangements made with the Community. But they stand to benefit from the agreements on tariffs on certain industrial materials (see Annex B); and it has been agreed that the Community will take speedy and effective action to deal with any abrupt dislocation of trade in agricultural products.
NEW ZEALAND DAIRY PRODUCTS AND LAMB
102. Butter accounts for about 11 per cent of New Zealand's total export earnings, and cheese for about 4 per cent. About 85 per cent of her export earnings from butter and cheese come from exports to the United Kingdom. Our aim has been to secure satisfactory arrangements for continuing access for New Zealand exports of these products to the markets of the enlarged Community. This was particularly desirable for butter, both because butter is much the more important to the New Zealand dairy industry and because New Zealand butter will be in direct competition with supplies from within the enlarged Community; the Community countries are not major producers of cheddar cheese.
103. It has been agreed that there will be special arrangements to guarantee New Zealand a market for agreed quantities of dairy products. For butter, the guaranteed quantity for the first five years will be reduced by 4 per cent per annum so that in the fifth year of the transitional period New Zealand will be able to sell at least 80 per cent of her present entitlement in the United Kingdom. For cheese, the quantities guaranteed will gradually be reduced through steps of 90, 80, 60 and 40 per cent in the first four years to 20 per cent of the present level by the fifth year. This means that in terms of milk equivalent New Zealand can be assured of selling at least 71 per cent of the present quantity in 1977. Moreover, New Zealand will under these arrangements enjoy a guaranteed price for these sales at the average of prices on our market during the four years 1969-72. We estimate that this will result in prices to New Zealand substantially higher than the average of recent years, when New Zealand has not had a guaranteed price in our market.
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