NEW ZEALAND'S TARIFF.

Press, Volume LXIX, Issue 20898, 4 July 1933, Page 10

NEW ZEALAND'S TARIFF.

♦ CASE FOR IMPORTS / ffcOM BRITAIN. certain reductions in duties sought. i . gpIDENCE BEFORE COMMISSION i; . ITHE PRESS Special Service,] WELLINGTON, July 3. The necessity of increasing New Zealand's purchases from the United Kingdom, on which the Dominion is So dependent for the sale of hexprimary products, was the keynote of the general case presented to the Tariff Commission to-day on behalf of the United Kingdom Manufacturers' and New Zealand Representatives' Association (Inc.) by Mr iCjr. Q. Sutton and Mr N. H. Russell. |T "We contend that to attain this pnd, certain reductions of existing "duties are of paramount importance. [;in order to reduce the present excessively high landed costs," said Mr Sutton. "We wish here to point otjt that as far as possible we have not stressed the question of exchange, as we realise that any tariff based on this unstable factor would be impossible to administer. We particularly request reduction in those duties which are protecting non-economic secondary industries, fhd in this connexion it is felt that there is no necessity to enlarge on the reasons which prevent New Zealand from being able for many years to come to build up economic industries, except in a few cases, by producing on a mass production basis, which is acknowledged to be the only method of producing economically. Broadly speaking, this association is of the opinion that any industry which, except perhaps in its early stages, cannot exist with the natural protection of freights and allied charges, is economically Unsound, and if excessively protected, is protected at the expense of the community generally. Some Protection Justified. "At the same time it is admitted that there are industries which, if the above statement is correct, are economically unsound, but which are entitled to some protection by way of duties, and this association does not object to this, always provided that such extra protection is not so excessive as almost to preclude the importations of similar lines manufactured elsewhere. We

wish to emphasise this, and provide s proof in fact that in the evidence f Submitted, speaking generally, we are not asking for duties to be abolished, but that they should be reduced. Also, it is submitted that protection is justified in certain cases of unfair competition—e.g., against countries with a lower /standard of living. We quote the following important clause of the agreement made at Ottawa between the United Kingdom and New Zealand: —'His Majesty's Government """ in New Zealand undertakes to institute an enquiry into existing protective duties, and where necessary to reduce them as speedily as possible to such a level as will place ' the United Kingdom producer in V the position of a domestic competiy tor'—that is, that the protection afforded to the New Zealand producer shall be on a level which will 4( give the United Kingdom producer % full opportunity of reasonable comi • petition on a basis of the relative \:l cost of economical and efficient production. Reasonable Competition. "Apart from .economic principles, we contend that in some of the classes quoted our evidence shows that the United Kingdom producer has not had full opportunity of reasonable competition with the New Zealand manufacturer on a basis of relative costs of economic and efficient production. We desire to emphasise the fact that while New Zealand relies upon the United Kingdom market for nearly 90 per cent, of her exports, and failure of that market would bring certain (disaster to us, how little the failure of New Zealand would affect the United Kingdom may be gleaned from the fact that of the total of United Kingdom imports, New Zealand supplies only 3.66 per cent., while of the United Kingdom's total exports New Zealand takes only 2.93 per cent. . "In view of the above, it is felt that there is no necessity to emphasise the absolute importance of strengthening our market by helping in every possible way those .United Kingdom manufacturers who desire to export to New Zealand. We also desire to mention the question of one-way freights, and stress the point that if ships have to come out from England in ballast (as, in fact, they have done recently) then our exports must necessarily to some extent pay the freight both ways. We contend that a lowering of duties will not necessarily mean a reduction in revenue, or an increase in unemployment, because, first, we are of opinion that increased imports would result in most cases in as much, if hot more, duty revenue being collected; and, second, that the cheapening of goods to the consumer would stimulate employment in other avenues of industry. Abolition Not Sought. "Also, as stated above, we are not asking for the abolition of duties, and the reductions we are asking for, if they are given effect to, will not necessarily mean the closing of New Zfealand industries, but will give United Kingdom manufacturers a /lair chance to compete. It has been stated that if New Zealand industries are not heavily protected, the New Zealand manufacturer will be driven to purchase his plant and machinery from the cheapest source, perhaps a foreign source. We contend that in most cases the United Kingdom would be the cheapest source; but apart from this, other factors must be taken into consideration when considering price. Surely quality, durability, efficiency, etc., gbunt, and in most lines the United thesefqualemphasise the f&ct that

it' the United Kingdom market i.s closed to us, New Zealand alone could not absorb our primary products. What would happen to the surplus? If the extreme view is taken, and our energies were then diverted from farming to manufacturing, what would we do with the surplus products from our factories? We are practically isolated—a mere pimple on the face of the map. "We particularly wish to state that we have not singled out only lines which are manufactured in New Zealand; but we are asking for a reduction of duties in some lines which are not manufactured in New Zealand. We are also asking for certain anomalies in tariff to be corrected without any reduction of duties, and we definitely deny that we are singling out only those lines which are manufactured in New Zealand, as we realise that in many cases the tariff protection afforded to New Zealand industries is not excessive. Even if a reduction of duties meant the closing of any industry, we contend that any loss of taxation—whether income tax or any other form—would be made up by extra taxation obtained from increased business done by importing houses. We are definitely favourable to reasonable tariffs; but we do ask that the United Kingdom manufacturer be enabled to compete fairly on this market in the spirit of the Ottawa Agreement. The possibilities which might follow if this agreement is not carried out could quite conceivably mean disaster to New Zealand." Mr, Mander's Questions. In answer to Mi A. E. Mander, secretary of the New Zealand Manufacturers' Association, Mr Sutton said that the statement he had tendered to the Commission was bein^ ; made on behalf of the association, and on behalf of the British manufacturers who were represented in New Zealand. Mr Mander: Are you authorised to make it on behalf of the British manufacturers? Mr Sutton: We are authorised to do anything we can do as their representatives. Mr Mander: With the preference which is now enjoyed by the United Kingdom manufacturers, why is it that in many cases they are unable to compete with foreign competition? Mr Sutton: I can hardly answer the question in general terms. Mr Mander: We are not objects in any way to British preference. We desire that Great Britain should enjoy as big a share of imports as possible. What I want to know is on what you are basing your claims for preference. Mr Sutton: We are asking for preference over foreigners. He said that foreign countries also employed cheap labour, and gained an advantage over the British manufacturer, who worked under better conditions. Mr Mander: You desire protection to compensate for that. Mr Sutton: Yes. We are asking on behalf of Britain for preference to enable British manufacturers to pay the price New Zealand expects for her primary produce. Mr Mander: Does the average British worker consume as much New Zealand farm produce as the average New Zealand worker? Mr Sutton: I have not come here for a wrestling match. It is not my game at all. Mr Mander: Do you think it would benefit the United Kingdom if the amount of employment increased in New Zealand? Ottawa Agreement. Mr Sutton: I have not considered that. Mr Mander asked Mr Sutton whether he agreed with the statement made in London by Mr L. A. Paish, British Trade Commissioner in New Zealand, in answer to an enquiry as to why Britain had not obtained more from New Zealand at Ottawa, that the reason was because the Dominion had done more than any other Dominion for Imperial preference, and that it would not be fair to press her to do still more. Mr Sutton: I don't think it matters two straws whether I agree or not. Professor B. E. Murphy (a member of the commission): It matters to us whether you answer the question. Dr. G. Craig (chairman of the commission): You can refuse to answer the question. Mr Sutton: I have not been able to give the matter sufficient attention to answer it.

Mr Mander: You suggest that we should reduce duties in favour of Great Britain, because Great Britain is our largest customer for our exports. Mr Sutton said that they asked for reduction only in cases where the New Zealand industry was uneconomic. Mr Mander: Does not Great Britain buy our butter because she needs it? Mr Sutton: Of course. Mr Mander: If there were two men unemployed, one in New Zealand and one in Great Britain, to whom would you prefer to give a job? A voice from the back: That is not a fair question. Professor Murphy: The Commission will decide what is a fair question. If that person cannot keep his mouth shut, he had better get out of the room. Mr Sutton: I am not going to answer the question. My association has not considered the matter.

!AN IMPORTER OF HOSIERY.

REPLY TO DOMINION MANUFACTURERS. REQUEST FOR LOWER DUTY. [THE PRESS Special Service.] WELLINGTON, June 3. In reply to representations to the Tariff Commission by New Zealand hosiery manufacturers, statements were made to the commission today by Mr G. S. Amos, on behalf of the United Kingdom Manufacturers' and New Zealand Representatives' Association (Inc.). The local firms had asked for the retention of the present duty of 27 J per cent, on English hosiery, Mr Amos said. One speaker had stated that there was no economic reason for importing finished goods, as they could be produced efficiently and economically by New Zealand factories provided that sufficient protection were granted to compensate for the difference between the United Kingdom and New Zealand general values and costs, and to secure for New Zealand industry a sufficient share of the market to enable it to continue producing on an economic basis. Mr Amos said that if these firms could .compete against a duty of 27£ pel cent, how was it that fe-L-1 ■iv<> \m. year„ when,

the surcharge, un English hosiery amounted to approximately 44 per cent., these same firms were importing from Canada, Australia, and even England undyed and unfinished hosiery, which they were only dyeing and finishing and boxing, in what they were led to believe were efficient hosiery factories. A local manufacturer had also stated that the raw material used was partly of Dominion origin. If this was the case, why was it that New Zealand hosiery manufacturers could not produce woollen hosiery, which was the only raw material of New Zealand origin, as there was no artificial silk, pure silk, or cotton produced in New Zealand, at a price which would compete with the imported English lines, which had today to bear landing charges of from 70 to 80 per cent, according to the value of the goods? Cashmere Hosiery. Confidential costs and samples would be produced to the commission, proving that for cashmere hosiery the New Zealand factory price was approximately double that of the English manufacturer. Mr Amos said that they would also ask the commission to enquire as to what, part of the 68,106 dozen silk and art silk hose (mentioned as being manufactured in New Zealand) was manufactured, and what was pari, imported and only dyed and finished in New Zealand. "Perhaps the most serious misstatement of facts was that made concerning the cnd-ol'-season jobbing or dumping by English manufacturers." said Mr Amos. "Of all sections in the drapery trade, the hosiery section is one section that has never been affected in this way. I have been in the hosiery trade for many years in this country, I was also, for seven years, in the English hosiery market. I have also had experience in American, Canadian, and Australian markets, and I never once have been offered, or have been able to obtain a job line because of hosiery (even factory seconds) being difficult to obtain, as the local market trade of the hosiery districts of England absorbs the whole available supply of factory faults. "There is no reason for, nor possibility of, end-of-season dumping of hosiery stocks, as it is the practice in this trade to manufacture only to order, and not to make or carry stocks except, in an unfinished state, of the lines which are being constantly called for. This contradiction will be endorsed by any person who knows English hosiery."

It had been stated that local manufacturers had had to bear the cost of the exchange rate on raw material. Imported goods had to bear not only the exchange on raw material but also the cost of exchange on the total price of the finished goods, in addition to duty, and could still be sold at a profit under the price of New Zealand lines; but unfortunately the public had to pay much more for their hosiery than they should, owing to excessive landing charges. Full-fashioned Hose. Until a few months ago, there was not a manufacturer in New Zealand producing full-fashioned hosiery, which was more in demand now than circular hosiery; but although it was not produced in New Zealand, it was still subject to the same high duty, and as a result sales were affected. Until about three years ago, 90 per cent, of the full-fashioned silk hosiery was imported from Canada and the United States. During the last three years, English manufacturers had endeavoured to provide for the requirements of this market, and their lines had been reduced in sympathy with the downward trend of world prices to such an extent that even, although landing charges had doubled during the last three years, lines of English hosiery were retailed to-day at prices 25 per cent, lower than those of three years ago, and if English silk hosiery could be landed on, say, a 40 per cent, basis, retail prices would be so low that imports would be greatly increased. "The cost of manufacture of fullfashioned hosiery is heavy owing to the very expensive machinery required, and it is necessary to have a large market to manufacture at an economic price," said Mr_Amos. "We ask that the duty on English hosiery should be reduced to 20 per cent."

COMPETITION BY JAPAN.

EVIDENCE FOR BRITISH MANUFACTURERS.

grave conceun expressed

[THE PRESS Special Service.]

WELLINGTON, July 3. Japanese competition was referred to in the evidence of the United Kingdom Manufacturers and New Zealand Representatives' Association, presented to the Tariff Commission today. It was contended that ad valorem duties were useless in preventing increasing importations fiom and the hope was expressed that the commission would give particular attention to the suggestion that duties be levied on a specific basis of so much an article, or so much a yard, etc. The following resolution, which was recently passed at a general meeting of the association, was placed before the commission:— "This association vie;vs with grave concern the alarming increase in the importation of goods from Japan. These goods are produced by workers who have a much lower standard of living than the workers in the United Kingdom, on whom we depend for the sale of the bulk of our primary products, and these imports are most seriously affecting New Zealand importers of similar goods from the United Kingdom. It must also be realised that while at present Japanese competition is threatening the United Kingdom industries only, the time is not far distant when Japanese goods will be imported into New Zealand in competition with local manufactures--for example, woollen goods—and it is obvious that if this is not prevented it means the closing down of those New Zealand industries. An Example Quoted. "Also, it is not possible for local manufacturers to buy British materials, and, with the addition of labour costs, compete with Japanese goods. To quote one example only: A rayon worker in the United Kingdom receives as much for one hour's work as a Japanese worker receives for one day's work. It is the United Kingdom worker who buys our produce. The success of the Japanese industry is due to a deadly combination of low wages, good workmanship, and favourable exchange; and whilst admitting that fair competition is desirable, it is obvious that industries in countries with a higher standard of living must either lower their standard or close their industries. "After a close study of ±jiis association is of thr -lion that enable,

United Kingdom to compete on even terms with those from Japan, the present method of levying duty should be altered, and that specific duties of so much an article or a yard, etc., should be levied. Ad Valorem Duties. "This will overcome the advantage (at present insuperable) by ad valorem duties which is enjoyed by countries where the current, domestic value of goods is so low. In this connexion it is interesting to note that the new India budget proposals substitute, in the case of rayons, specific duties of four annas a square yard for the previous 50 per cent. ad. valorem duty. The previous ad valorem duty proved ineffective in protecting the imports of United Kingdom rayons from the inroads of Japanese competition. Although the rayon industry is quoted, competition is being felt in many other lines in New Zealand. Also, this association strongly urges that goods should be compulsorily branded with the country of origin. Realising the extreme seriousness of the position, this association urges that the present Tariff Commission investigate the position, and would impress the fact that the only solution appears to be to substitute specific duties for ad valorem duties, and a compulsory branding of all goods where possible on the articles themselves. "We are not asking for an embargo to be placed on Japanese importations; but that the tariff be so devised as to enable imports from the United Kingdom to compete on even terms It js pointed out that in London, customs officials check the declarations of values, etc.; but in Japan no such check is made."

SOME INDIVIDUAL REQUESTS. BRITISH MAN LTACTIIH liltS. I'IiES.S ASSOUATIUX '1 E f./.u it M. I WELLINGTON, July 3. Requests were made to the Tariff Commission to-day by individual members of the United Kingdom Manufacturers' and New Zealand Representatives' Association, as follows, the present rates being given in parentheses. The first figure given is the British preference, the second the general tariff, and the third the Australian Treaty:— Gloves—2o per cent. (27J); 50 per cent. (50); 33i per cent. (25). Hosiery—2o per cent. (27J); 45 per cent. (50); 32J per cent. (25). Insect powder—lo per cent. (20); 25 per cent. 145); 20 per cent. (20). Rennet (household)-—Free (20); 25 per cent. (45); 20 per cent. (20). Toilet preparations—ls per cent. (35); 35 per cent. (55); 25 per cent. (25). Concentrated jellies—s per cent. (4d per lb); 25 per cent. <6d per lb); 20 per cent. (4d per lb). Macaroni -Free (free); 25 per cent. (25); free (30 per cent.). Malt extract, and malt and oil —5 per cent. (2d or 20 per cent.); 25 per cent. (4d or 40 per cent.); 20 per cent. (2d or 20 per cent.). Fish and meat pastes—s per cent. (20); 20 per cent. (20); 20 per cent. (20). Wooden matches—Free (Is); 2s gross boxes (2s); 2s (Is). Pickles—Nil (3s gallon>; 20 per cent. (6s); 10 per cent. (3s). Sauces—ls (4s gallon); 5s (8s); 4s (4s). Other provisions—s per cent. (20); 2;i per cent. (45); 20 per cent. (20). Toilet soaps—lo per cent. (25); 30 per cent. (50); 30 per cent. (30). Hard soap (bar)—s per cent. (25); 20 per cent. (50); 15 per cent. (30). Perfumed spirits, lavender, and Cologne waters—Only a straight-out duty of 25 per cent, ad valorem 90s, or 50 per cent, ad valorem 70s, or 25 per cent, ad valorem. Present rate, 70s a gallon, or 25 per cent, ad valorem; or 50 per cent, ad valorem, 70s; or 25 per cent, ad valorem. Essences, flavoured—s per cent, ad val. (40s a gallon; 30 per cent. (40s); 20 per cent. (365). Chemicals and druggists' sundries —15 per cent. (20); 40 per cent. (45); 20 per cent. (20). Aspirins—lo per cent. (20); 35 per cent. (45); 20 per cent. (20). Health Saline—s per cent. (20); 30 per cent. (45); 20 per cent. (20). Biscuits—Free (20); 25 per cent. (45); 20 per cent. (20). Tinned fish, other than salmon—Nil (2d); 20 per cent. (3d); 10 per cent. (2d). Jams, jellies, marmalade, and preserves—Free (2d); 20 per cent, ad valorem (sd); 20 per cent. (24d). In all cases the general tariff carries an additional duty of 9-40ths.