ECONOMIC UNION.

Press, Volume LXVI, Issue 20084, 13 November 1930, Page 16

ECONOMIC UNION.

TRADE WITH DOMINIONS. TAX ON FOREIGN GOODS.

(FROM OUR OWN CORRSgpoHDEHT.) LONDON, October 8. What the New Zealand Prime Minister thinks might be a "good scheme" is a suggestion put forth in a report on Inter-Imperial Trade prepared by t the Research Committee of the Empire Economic Uuion, of which Lord Melchett is the president.

"It is the first outline in black and white of the foundations of a trade agreement which might be arrived at between the Dominions and the Mother Country," said Mr Forbes. Trade agreements between the Home Country and the Governments of Australia, Canada, New Zealand, the Irish Free State, and India, involving the imposition by the Dominions on foreign goods of 20 per cent., are outlined in this memorandum. The committee of the Union who prepared it include Mr L. S. Amery, M.P. (chairman), Sir John Corcoran, Mr D. N. Dunlop, Sir William Larke, Lord Lloyd of Dolobran, Dr. W. H. McLean, Mr A. V. Malcolmson, Mr Henry Mond, M.P., Sir B. H. Morgan, and Mr H. C. B. Mynors. The proposals to improve the trade relations between Great Britain and New Zealand are an example of what could be accomplished in smoothing the way towards Empire fiscal unity. One suggestion is that the United Kingdom should, for a period of ten years certain, put duties of a lb on foreign butter and cheese, 5s a cwt on foreign apples, -}d a lb on foreign mutton and beef, and id a lb on foreign lamb. In return for this New Zealand would be asked to admit free of duty articles manufactured in the United Kingdom, or give them a preference of 20 per cent., compared with foreign manufacture.

Need to Stimulate Empire Trade. Lord Melchett, in a brief preface, says: "We do not visualise a Chinese wall round the Empire which should entirely exclude foreign trade. On the other hand, we definitely hold the view that an overwhelming case exists for the special stimulation of inter-Imperial trade." One comment reads: "The prosperity of any one Empire unit is more beneficial to the rest than a similar increase in the prosperity of any foreign country." The report details the various methods of Empire trade development which have been adopted, such as Preference, the Colonial Stock Act, Empire Marketing Board, the Act which fixes the quota of cinematograph films to be exhibited, the Government policy of obtaining supplies from Uunitd Kingdom and Empire sources so far as possible, and the fact that the United Kingdom bears the main burden of the cost of Imperial defence. The suggested alternative methods in the development of inter-Imperial trade are examined at length. These include Import Boards, Bulk Purchases, and a Licensing System for Imports. Reasons are given for preferring the more familiar method of extending the existing system of tariff preferences. It is admitted that "in a strictly limited number of cases there may be definite advantage in the quota over a tariff system." Wheat and sugar are specified as commodities to which the quota system is especially suitable. "The method of a trade agreement," states the report, "has the advantage that the preferences and other kinds of assistance take the forms which are likely to be of the maximum help to each party. Moreover, if the agreements are made for a sufficiently long period of time, their terms cease, during that period, to be matters* of political controversy in the countries concerned, and accordingly industry is granted an assured period of certainty." It is contemplated that each party to an agreement would be free to extend its advantages to other Empire countries, and the report sets out the bases of such agreements "purely tentatively and provisionally," No attempt, it is explained, has been made to prepare a schedule of British' manufactured goods which are to be entitled to free entry into the various parts of the Empire. This could only be done "after the fullest consideration between- the respective Governments and with the full information which is at their disposal." The difficulties created by the "most-favoured-nation" clause are discussed; and it is recommended that consideration be given to the denunciation of those commercial treaties which contain this clause, and the negotiation of fresh treaties which would permit the United Kingdom to have a general as well as an intermediate tariff on foreign products.

Other Suggestions. Further suggestion for the increase of inter-Imperial trade include an Imperial parcel post service, the support both by the Governments and the peoples of the Empire of the Imperial and international communications system, a recommendation by the Treasury that in the case of overseas loans precautions should be taken by the issuing houses to see that the loans benefit British industry, and a discussion of the possibility of forming an interImperial currency.

Proposed Economic Secretariat. The creation of an Imperial Economic Secretariat is strongly favoured, and it is remarked that, despite the activities of the various advisory committees, the Marketing Board and the Imperial Institute, "the Empire as a whole is less well catered for from the economic point of view than the nations of the world are by the Economic Secretariat of Geneva under the auspices of the League of Nations."