Empire Expects Crucial Struggle Over Tariffs In 1946

Auckland Star, Volume LXXVI, Issue 274, 19 November 1945, Page 4

Empire Expects Crucial Struggle Over Tariffs In 1946

By E. C. FRANKLIN, M.A., F.R.E.S.

Deep Rift Divides World Into Trade Blocs As

certainty about America's. efforts to break down trade barriers is that the struggle will be hard. Another is that the dollarsterling rift which has divided more than half the nations of the world into two great groups has cut right across the Empire. To-day Canada is economically, as well as geographically, in the American camp.

Already it is plain that Canada is exposed to tremendous two-way pressure, and that, willy-nilly, Britain is forced to "take action which hurts, and'will'probably hurt more. Most prosperous and by far the most powerful of the Dominions, Canada thus finds herself at the awkward stage during the changeover from war to peace in a particularly tough spot.

New Zealand and Australia, behind Britain, seem, for the time being, at any rate, fortunately on the safer side. To-day, as in the past, their economic ties are holding well. There is surely something of a paradox in this, that Britain in adversity is still to be preferred to Immensely wealthy and powerful United States as a trade partner.

Weeks of hard bargaining at Washington have given time for the Dominions to recover from the initial shock of America's suggestion, early last month, that the Empire should abandon trade pre-

,ference and pave the way for finan-< cial backing to' rebuild trade on a new and broader basis. Doubtless the basis America had in mind was one which would open up Empire markets to admit an increasing flow of. American goods, but probably no one in the Dominions now expects any sudden finality on this manysided issue.

Next March delegates from fifteen nations will meet in the United States to decide upon an international trade and commerce charter and also on the calling of an international trade conference to be held in June, when the main issue for consideration will be the abolition of preferences and tariffs. If trade preferences are to figure so prominently and are apparently to be a bargaining counter for financial aid, the Dominions must, of course, have a great deal to say about them. Imperial preference is a deeply rooted policy, interwoven into the fabric of trade in every part of the Empire. For a long period of years, preference to Empire goods has been the underlying basis of trade between New Zealand and Britain, and over the past 13 years, since the Ottawa conference, there has been an unmistakable tendency, so far as the Dominion is concerned, for trade to gravitate more and more into this main channel.

Of late.years, with war influences added, reliance upon the British

>market has grown until the proportion of New Zealand exports absorbed by Britain is well above the pre-war figure of 80 per cent, and so close is the approach to complete dependence that it may be said the situation is dangerous. New Zealand, it may be contended, should lose no time in exploring and developing new markets. Imperial preference grew up and reached its fullest development midway between the two wars. It was a reflection of world trends, accentuated by the slump, and perhaps most of all, by the isolationist attitude of the United States. It was, therefore, defensive in character.

Second only to British Home producers, the Dominions. were given at Ottawa virtually a guaranteed outlet for their surplus foodstuffs. A duty of 15/ per cwt was imposed by Britain against foreign butter, 15 per cent against cheese, 6/ per cwt against unsweetened condensed milk and other processed milk, 3/ to 4/6 per cwt against apples, and variable rates against other fruits. All these lines were admitted free from Empire countries.

Also, a general 10 per cent ad valorem duty was set for foreign countries in regard to leather, tallow, canned meat, barley, flour, macaroni, dried peas, pressed poultry, casein, meat essence and extracts, copra, sugar of milk and sausage casings, again with free entry for Dominion exports.