TRADE POLICY.

Auckland Star, Volume LXV, Issue 271, 15 November 1934, Page 8

TRADE POLICY.

N.Z. AND AUSTRALIA CURRENCY PROBLEM. DIVERSION FROM DOMINION. HIGH EXCHANGE ON BRITAIN. (By Telegraph.—Special to " Star.") WELLINGTON, this day. The diversion to Australia through high exchange on Britain of business which New Zealand would prefer to transact with the Old Country is one of the most important and difficult questions for discussion by Mr. Coates, Minister of Customs, and Mr. Masters, Minister of Industries and Commerce, who leave here to-day for Australia.

Parliament, in the recent session, completely overhauled the Customs tariff in accordance with New Zealand's undertaking under the Ottawa Agreement to give improved preference to British manufacturer, but this principle is being seriously undermined through currency conditions on both sides of the Tasman. At the moment New Zealand currency shows a slight premium over that of the Commonwealth, but both countries stand about 24 per cent lower than sterling, so that a New Zealand importer finds a distinct financial advantage in buying goods from the Commonwealth, because it costs less for drafts payable in that country. Exchange of Products. Australia has for many years enjoyed a substantial advantage over New Zealand in the exchange of products of the respective, countries. For a five-year period prior to the trade negotiations which were conducted by the former Commonwealth Minister, Mr. Massey Greene, who visited New Zealand for the purpose, the Commonwealth had secured an advantage of over £5,230,000 in value on the balance of trade between the countries. This tendency is not declining, the excess of Australian imports to New Zealand over our exports to Australia during the- nine months ended in September having amounted to £934,000. If New Zealand is to give the United Kingdom effective preference in respect of many important lines now produced on a large scale in Australia, such as iron manufactures and radio apparatus, it will be necessary to modify the tariff in relation, to the. Commonwealth. and> not allow it to continue, on the same basis as British preferential rates. New Zealand, in its trade agreement with the Commonwealth, expressly reserved the right to take such action. Although it was formerly the practice to extend to all parts of the Empire the preferential tariff treatment given by New Zealand to Britain, this policy has for several vears been superseded by definite trade agreements between . the respective countries. Last Revision in 1932. Australia's trade agreement with New Zealand was last revised in 1932. but many points remain outstanding. These are giving Commonwealth Ministers cause for anxiety. The situation wa 3 happily put in Wellington this week by the new Australian Trade .Commissioner, Mr. R. H. Nesbitt, who; when referring to the friendly relations '.existing on either side of the Tasman,. added: "I hope we are not going to start an argujnent, in which we will throw oranges and you will throw potatoes, at us." Another factor in Australian trade relations which has to be adjusted is that the Commonwealth charges a.higher rate of duty on. many articles which New Zealand exports to them than New Zealand imposes if similar ' goods' are brought into this country from Australia. Provision is, however, made in the mutual trade agreement,, under which either country . can request the other to admit anjr lines of goods at the rate which is-applicable in the-coun-try of export. If the request is not complied with, the country making it can, after " the expiration of three months, impose on the goods of the other country a duty not greater" than it charges under its British preferential tariff. Foreign Steamship Lines. Competition by foreign lines of steamships in. the - intercolonial trade is a question which New Zealand in particular desires to raise. Following the recent statement' by the Prime Minister that action would be taken to protect British shipping in this route, the Union Steam Ship Company announced its intention to' build a fast liner for the Tasman service, and it is understood that plans are being proceeded with. If Australia. and New Zealand mutually agree on a protection policy, it will be possible to enforce it by a passenger tax such as is'now; levied on all overseas tickets. ; .