TRADE DIVERSION

Auckland Star, Volume LXIV, Issue 253, 26 October 1933, Page 11

TRADE DIVERSION

BRITISH GOODS.

CHECK TO BE DEVISED.

WITHIN TWO MONTHS.

(By Telegraph.—rarliamentary Reporter.) WELLINGTON, this day. • To arrest the possibility of a further diversion of New Zealand's import trade from the United Kingdom to Australia, which may develop through the Commonwealth and Dominion currencies being at parity, a special agreement has been entered into between the New Zealand and Australian Governments. The terms of this supplementary arrangement were disclosed to the House by Mr. Coates last night. The Minister expressed the opinion that the diversion which had taken place over recent years had been occasioned almost wholly by the difference in. exchange rates between New Zealand on London, on the one hand, and New Zealand on Australia, on the other. The Customs Department, to offset the exchange advantage, had, where necessary, imposed a dumping duty to the extent of it, in exccss of 5 per cent, on nearly all dutiable lines, and on a limited class of free goods. When the exchange rate, New Zealand on Australia, was 18| per cent an exchange dumping duty of 13| per cent was levied, but when, on June 4, 1931, the exchange rate was reduced to 13 J per cent, the exchange dumping duty was lowered to 8| per cent. Now that the rate, New Zealand on London, had increased to 25 per cent, and New Zealand and Australian currencies were at par with each other, there was possibility of a further diversion from,the United Kingdom to the Commonwealth under the arrangement now entered into with the Commonwealth Government. Two Possible Checks. The Minister added that if there had been a substantial diversion of New Zealand's import trade from the United Kingdom to Australia since March 31 last, the necessary steps would have been taken to check it. It was highly desirable to ensure that, as far as possible, New Zealand's import trade with the United Kingdom should be maintained. Both tho Australian and New Zealand Governments had undertaken to devise a satisfactory method of meeting the position, either by the regulation of trade in the goods affected or by other mutually acceptable means. If no such method were adopted within a reasonable time, being not less than two months, tho New Zealand \ Government alone might adopt such corrective means as it deemed appropriate. Where, however, action was taken by regulation* of trade, it must not be designed to reduce the volume between the Commonwealth and the Dominion, as at March 31 last. To establish a case for joint or individual action satisfactory evidence must be produced to show that, for the period, the value of imports from the United Kingdom had substantially declined, while at the same time that of imports from Australia had substantially increased. The trade figures between the respective countries for the last financial year were to afford the basis for comparison.