INEQUITABLE, DISCRIMINATORY.

Ashburton Guardian, Volume 55, Issue 126, 9 March 1935, Page 3

INEQUITABLE, DISCRIMINATORY.

SERIOUS ECONOMIC LOSS. HEAVY PENALTY ON PRODUCERS % / AFFECTS DOMINION TARIFF POLICY. (Special to the “Guardian.”) WELLINGTON, March 8. the proposal of the British Government to impose a levy on. all meat imported into the United Kingdom as inequitable and discriminatory as far as New Zealand is concerned, the New Zealand Government, in stating that it cannot support the principle, has informed the British Government that its adoption would mean that the Dominion’s mutton and lamb producers would be heavily penalised to assist in the solution .of what is essentially a beef problem. In the opinion of * New Zealand, the adoption of the scheme would end the Ottawa Agreement, thus affecting New Zealand’s tariff policy.

New Zealand's answer to Britain was revealed to-night by the Prime Minister (the Rt. Hon. G. W. Forbes) who said that this answer had been formulated in reply to the document setting out the longterm meat policy of the United Kingdom Government, which had been cabled for consideration to the dominions and the Government of Argentina. The terms of this communication summarised in a cablegram published yesterday. The full text of the New Zealand Government's reply is as follows: "His Majesty's Government in New Zealand have given full consideration to your telegram of February 13, /'Since the Ottawa Agreement New Zealand has endeavoured to co-operate with the United Kingdom in attempt to correct the situation caused by the abnormal glut which then existed in the market for meat. We believe that the arrangement made at Ottawa has so far worked satisfactorily. Despite difficulties in the initiation of the plan, it will be appreciated, that New Zealand has not acted in any way which is inconsistent with the spirit of the agreement made in 1932, It is our opinion that no aspect of New Zealand's policy in regard io meat has intensified the difficulties of the British producer or run counter to the expressed wish of His Majesty's Govern- 1 ment in the United Kingdom. Import of British Coods. "Further, New Zealand has endeavoured on her part to carry out the Ottawa arrangements in respect of tariff .reductions both by action immediately following the Conference and by a subsequent general review of the tariff. The result has been a. marked lowering of duties over a wide range of British imports into New Zealand. Many duties on British imports have been abolished, In consequence the import of British manufactured goods has increased substantially. His Majesty's Government in the United Kingdom will appreciate that even prior to Ottawa New Zealand's tariff on British "goods, was approximately one-fourth' as heavy as were the comparable tariffs of other Dominions. "We desire to re-emphasise that the economic development of New Zealand has been contingent upon the expansion of our main export industries. This expansion was necessary to provide the means of payment of interest on British capital -invested in tins Dominion and it enabled us to purchase increasing quantities of British exports. This was a mutually advantag- . eous development. \ "In the light of the foregoing and of the sympathetic consideration of His Majesty's Government in the United Kingdom in the past we find it difficult to believe that the proposals for a levy on all meat imported into the Lnited Kingdom from New Zealand will provide a satisfactory solution. It would be discriminatory in its efforts and would involve New Zealand m serious Economic loss. It would negative all the adjustments made in Isew Zeaiani designed to reduce farming costs.

Mutton and Lamb. "The position in regard to mutton and lamb has been satisfactorily adjusted as a result of the Ottawa Agreement. The difficulties facing the United Kingdom are not directly influenced by supplies of mutton and lamb. The problem in the Lmtcd Kingdom as stated in recent communications is primarily related to bee for which the demand of the 'British consumer has been falling off, and it would appear that New Zealand s share of the beef imports is not such as would substantially affect the situa°"The imposition of the proposed levy would not only terminate the Ottawa Agreement, which New Zealand has made strenuous efforts to observe, but would, also inflict severe and undue hardship on the sheep industry of tins country. In fact,- our mutton and lamb producers would be heayily penalised to' assist in the solution of what is essentially a beef problem.^ A Levy Payment. '" "New Zealand regrets that it cannot voluntarily support the principle ot a levy; and in the form proposed it is especially repugnant to meat producers and to the people of this Dominion. New Zealand with a population of one and a-half millions, with the highest per capita external trade in the world, with meat exports amounting to a quarter of our total export values—a proportion which is enormously greater

than that of any other Dominion—would be called upon to cany a levy which is demonstrably a far greater burden to New Zealand than to any other British Dominion. We urge that the proposal is inequitable and dis- ' criminatory. “In our view the hope that the meat supplying countries would agree amongst themselves to restrict supplies to suit the needs of the market for meat is slender, though if it is the wish of His Majesty’s Government in the United Kingdom New Zealand would, of course, be prepared to join in any discussions. We think that any agreement should embrace all suppliers if reasonable price stability is to be achieved. ,Would Destroy Results “We consider that the proposal of the British Government would destroy the mutually beneficial results arising from the Ottawa Agreement. In the case of New Zealand it would be contrary/to the policy of giving the Dominions more favourable treatment than that accorded to countries outside the Empire, since New Zealand is the least able among supplying countries to bear the disproportionate and onerous burden of a levy. In addition we believe that the market would be heavily over-supplied, and this would involve a heavy fall in prices. Thus New Zealand’s economic position would bo rendered precarious. “The long-term proposals of the United Kingdom Government in regard to meat, «s expressed in your telegram of February 13, may react on our tariff policy. We fear that the proposal to impose a levy on all meats imported into the United Kingdom would so damage our external trade as to bring into prominence the whole question of tariff revision in New Zealand. This we are most anxious to avoid. “Finally we would emphasise very definitely that any contemplated action which may be construed as undermining the principles underlying the Ottawa Agreement should be avoided, and before the Ottawa Agreement as it stands is amended a formal conference should consider and approve or any alterations.” v