DUMPING DUTY.

Auckland Star, Volume LXII, Issue 95, 23 April 1931, Page 9

DUMPING DUTY.

AUSTRALIAN EXCHANGE.

COMPTROLLER'S EXPLANATIO

INTERPRETATION OF STATUTE,

j Correspondence between the Auckland Chamber of Commerce and the Customs Department on the subject of the Australian exchange dumping duty has been passing for some time, and at this morning's meeting of the chamber a lengthy letter was received from the Comptroller. In a letter dated April 14, the chamber pointed out that, according to the second schedule of the Customs Amendment Act, 1921, the special duty levied on goods from countries with depreciating currencies does not exceed 25 per cent of the amount of the depreciation, and the chamber had never contemplated the imposition of a duty equal to 100 per cent of that amount. So high a duty could not be justified on economic grounds, it beir.g well recognised that when the exchanges move adversely to a country the internal price level in the country with the depreciating currency, sooner or later adjusts itself to the exchange rates. The chamber expressed prrave doubts whether there was any legal authority contained in sections of the Act quoted by the Comptroller for the action that had been taken. The chamber did not consider there was any justification for an exchange dumping duty against pood* imported from Australia, practically the whole of the local consumption of which was drawn from the Commonwealth. Comptroller's Views. In reply, the Comptroller wrote: — '"I understand that authorities generally recognise that the effect of fluctuations in exchange in a country is not permanently to assist the export of soods from that country. I have never, however, seen any authoritative statement as to any definite length of time taken for the internal price level to adjust itself to the altered conditions. In all cases (except one) which f have investigated during the past six weeks in which exchange premiums over o per cent have been allowed it is quite evident that if some act'cn had not | been taken under the Customs Act the result would have been, in effect, to lower the rate of duty payable by the amount of the premium. In these circumstances, it may well happen that the protection afforded by Parliament to local primary and secondary industries might be made ineffective owing to the advantages obtained by importing goods from the Commonwealth.

"Duties of 20 per cent and 25 per cent ad valorem (plus primage or surtax) are -imposed on many clas.-v? ot goods shipped from Australia and if exchange premium at the rates mentioned rbove is allowed to operate without any corresponding set-off. the r;3ult must bt to reduce the sale and production of New Zealand goods, thus throwing more men into the ranks of the unemployed. In view of the possibility of this taking place, the Government decided to invoke the provision of section 11 of the Customs Amendment Act, 1921. "Each Case on Its Merits." "In the isolated case to which I have referred an adjustment of the internal prices had already taken place. V arying opinions were received as to the reason for the adjustment, but as no local industrv was prejudiced it was decided to admit the goods without any defos't The recognition that such cases wouiu arise was one of the reasons whj it was decided that each cas 2 was to be considered on its merits and that doubtful cases were to be referred to this office. This also illustrates the way m which it was considered that effect, was bein»- ~iven to the desirability of a partially-counteracting dumping duty, referred to in the 'Auckland Chamber of Commerce Journal' of March, 1931. Had it happened in the ease mentioned that a partial adjustment of internal prices onlv had taken place a deposit less than the amount of the exchange would have been required. "It may be that a court of law would take a different view as to the effect of section 11 of the Act, but until the view of the court is obtained the Department must act on its interpretation of the statute." The letter was received.