TARIFF RETALIATION.

Auckland Star, Volume LXI, Issue 198, 22 August 1930, Page 6

TARIFF RETALIATION.

The decision of the Government to put Canadian motor cars and accessories on the general tariff list involves questions of great political and commercial importance to the Dominion. As is generally known, since 1925 New Zealand goods entering Canada have been admitted under an extension of the agreement between Canada and Australia, which allows certain reductions in duty on Commonwealth products. But in May of this year the Canadian Parliament increased the British preferential tariff rate on butter from one cent to four cents per lb, thereby heavily handicapping our dairy export trade, and the new Canadian Government has now informed New Zealand that it cannot extend the benefits of the Australian agreement rates to our goods beyond October. Our own Government has therefore decided to impose a retaliatory duty on Canadian motor cars with a view to negotiating some more definite and satisfactory arrangement later on. We believe that public opinion throughout the country will support the Prime Minister in the stand that he has taken. For Mr. Forbes has shown commendable courage in taking such prompt and vigorous steps to defend the interests of our primary producers in the Canadian market, even at the risk of sacrificing an important source of revenue at a time when he needs all the taxation that he can collect. At the same time, by making use of the effective weapon of retaliation, he has indicated to other governments that New Zealand is by no means helpless in the "struggle for existence" that rages so fiercely in the world's markets to-day, and he has provided, himself with a useful and powerful argument to be employed in the discussions | and negotiations that are. certain to ensue between the two Governments later on. So far as New Zealand is concerned, the immediate effect of the higher tariff will be a rise in the price of Canadian motor cars, and presumably a reduction in the number imported. As we spent nearly £2,400,000 on Canadian vehicles and motoring material last year, representing 65 per cent of our total motor requirements, a falling-off in this special branch of imports, though it will reduce the Customs returns, will not- be an unmixed evil. But in Canada, naturally, a more serious view is taken of the situation thus created. The news of the retaliatory duty is said to have come as a shock to the Bennett Government, whicli came into office partly on the "bar New Zealand butter" cry; and the conflict of industrial interests between the eastern and western sections of Canada may complicate the position still further. However, Mr. jßennett, like Mr. Forbes, has notified his intention of reaching finality on these matters bv direct negotiation, and no doubt, when Mr. Forbes returns from the Imperial Conference, he will lie able to announce that a compromise has been effected on lines relatively satisfaci lory to all parties concerned.