RECIPROCITY IN TRADE

Press, Volume LXXII, Issue 21975, 26 December 1936, Page 9

RECIPROCITY IN TRADE

NEW ZEALAND’S PLAN EXPLAINED t ADDRESS BY MR NASH AT SHEFFIELD BIGGER MARKET IN BRITAIN SOUGHT Cnou 001 own coasßSPOinjEirrJ LONDON, December 5. Sheffield business men heard Mr W. Nash, New Zealand Minister for Finance and Marketing, propound the New Zealand Government’s theory of trade reciprocity at a civic banquet, presided over by the Lord Mayor of Sheffield, after the opening of the Dominion's “reciprocity campaign” in Sheffield this week. Mr Nash won instant approval for the clarity with which he explained the scheme, and for the ideals on which the plan is based. Although there were some, perhaps, who entertained doubts that such a system could be introduced, there was none who was not charmed by the Minister’s sincerity and his personality. When replying to the toast, proposed by Mr Nash, of the Sheffield Chamber of Commerce, Mr A. K. Wilson, its president* mentioned that both the United Kingdom and New Zealand had the same objective in reciprocal trade. In a friendly spirit of helpfulness he made some observations upon the question of exchange, the revision of the Ottawa Agreements, and the use made of the “Canadian backdoor” for the marketing of American goods in the Dominion. Mr Nash roused his audience to laughter by declaring that there were many things worth talking about to which he would like to pay attention. There were cricket and football exploits, and, of course, the unbeatable All Black team of 1905. Anybody wno knew anything about Rugby knew that the 1905 team was unbeatable and that Morgan never really scored that sole try at Swansea! But, said the Minister, he had been brought to Sheffield by an Act of Parliament unique in the English-speaking world, the Primary Products Marketing Act, and so he would make some explanation of it to them. Mr Nash began by quoting clauses empowering a New Zealand Minister for Marketing to make agreements for the sale of goods and produce between that Dominion, the United Kingdom, and the other Dominions. Policy Explained New Zealand, he continued, recognised that Britain had done more for it than any other country in the world had dreamed Of doing, and that she could not live as well without Great Britain as she could with her. He had therefore come to say, “Give New Zealand an expanding market inside the shores of the United Kingdom for the products that can be brought into being from our soil, and we will see that the credits that are raised from the sale of those products are used to the full to buy products from you.” “We can do it, too,” Mr Nash went on, “because we own our Central Bank, and there is not a fraction of private money inside it. There is a clause in the Reserve Bank Amendment Bill which says that the Minister for Finance controls in its entirety the external exchange built up from the sale of our products overseas. I do not think that a fairer proposition could be put than that.” Mr Nash then discussed New Zealand's present trade with Great Britain, the value of the goods brought by the Dominion, the amount paid in interest on loans, and the value of the shipping freights on goods being conveyed to and from the Dominion. Taking all those factors into consideration it would be found that New Zealand was importing as much from the United Kingdom as was economically possible. But there was still more room for the Dominion to buy further in the United Kingdom, especially if her sales expanded in the Mother Country. She was, in fact, prepared to offer to the United Kingdom all the proceeds of her exports, so that they might be used for the purchase of United Kingdom goods. Turning to the theory of Free Trade, the Minister said that from an economic point of view it was magnificent. Yet it would not work, because it implied that “if the other fellow won’t play you can’t play.” Every year in New Zealand pastoral products had been brought into being on an ever-increasing scale, because of the assistance of machinery and science. To-day the position was being reached where the Dominion could not usefully employ all her people in pastoral activity, and the height of absurdity was being realised in that a small country with but a million and a half people was sending her children overseas because no work could be found for them inside the Free Trade philosophy. He wished the world might reown that policy, but it was not to be for the present The Way Out The next policy to be considered was protection. That meant that commodities would cost more, that eventually prices would be rationalised, and would be raised. He believed, however, that there was another way: that there could be a regulated expansion of the production of the commodities necessary for the well-being of the two countries. Millions of people in the United Kingdom were not getting the nutritious food they ought to eat. and therefore New Zealand said: “Give us an expanding market so that we may supply them.” "If we can persuade the United Kingdom to give us that market, what will we do?” asked Mr Nash. He expected that New Zealand’s exports this year would be worth £50,000,000. A certain sum was required to pay her bills—and the New Zealanders believed in paying their bills. Sometimes they might think they were paying too much, and if they could alter that by simple agreement they would. If not, they would go on paying, even if it hurt. After all bills had been met the surplus of income left would be at the disposal of the manufacturers of the United Kingdom—if they would come to an agreement. There was one stipulation: the New Zealand Government

wanted to determine what goods should go into the Dominion, for certain goods could be manufactured and the Government considered that, rather than pay the unemployed awa 6s a day to do nothing, it would be better to lose 4s a day fay employing him in some useful occupation. Apart from that. New Zealand promised to take Britain’s goods. Sha would shut out goods from Japan to take those from Manchester, tor example, even though she could diet threa yards of cotton from Japan for tha price of one English yard, and She Believed it a wise policy for it would afford the Manchester man a decent standard of living. The Exchange Bate “Many people have asked me why New Zealand has not altered its exchange rate,” Mr Nash continued- “My answer is ‘because we cannot help ourselves.’ It will be done ultimately, but it cannot be done now. Reciprocity of trade will pave the way to lowering it. for the only way to pay for goods in that event will be by the credits created by the sale of our produce. “We will do everything humanly possible to keep our link with the British Commonwealth tied together loosely and freely. The cord that binds us together may become tangled sometimes, but we will beiwiUing to malm sacrifices to take the skein again and to straighten it so that we may go forward to a better life.” he added. Replying to the toast of the Sheffield Chamber of Commerce, Mr Wilson considered that the “pronouncement to maintain sterling may be of considerable importance.” Like New Zealand, the United Kingdom bad the same objective of reciprocal trade. It had Beta mentioned by Sir James Parr last year that New Zealand bought more from England than any other country in Europe, and that Britain was the Dominion’s most important market. If that relationship continued neither country would have cause to grumble. There was no doubt, however, that the establishment of the exchange rate had meant an automatic addition to the tariff on goods bought by the Dominion, and was, in fact, the creation of a duty. It had affected the prices of Sheffield goods very considerably. and he asked that Sheffield’s position should be remembered from that angle,, A large amount of Sheffield's business had been diverted to Australia, and the sale of Sheffield’s goods in New Zealand had been affected. Consequently there had been a difference in tha city’s ability to take New Zealand produce. Ottawa Undertaking Mr Wilson expressed a hope that the appeals of a section of the New Zealand community for the establishment of manufactures on a semi-ultra nationalistic basis—a basis which must damage and not help trade relations between the two countries— would not receive the official response which they desired. He recalled that by clause 8 of the Ottawa agreements. New Zealand had undertaken that tha protection afforied her producers should be on a level which would give the United Kingdom producer full opportunity of reasonable competition oa the basis of relative cost Mr Wilson asked that full implementation should be given that clause. The Ottawa agreements were Ij be revised, and he hoped that the present New StefanH Government would implement the new arrangements “better than in some respects did its nredeeessors.” In a reference to the “Canadian back door,” the president said that American factories with branches In Canute could obtain all the advantage accorded to Empire goods. The restrictions appeared to be quite ineffective at present. The normal percentage should be 100. and smaller percentage* allowed only after investigation. When proposing the toast of -The Lord Mayor.” Mr W. J. Jordan »Higti Commissioner) mentioned an instance in which the sales of New Zealand butter could be increased in England. The British Army, he said, was fed on margarine. If a change over to butter were made both the army and the Dominion would benefit. In reply the Lord Mayor *Mr A. E. Longden) declared that the New Zealanders were regarded as friends in Sheffield. They represented a wonderful country and everything that belonged to agriculture, and it was no doubt the open-air life and the nearness to nature which gave the New Zealanders the broad outlook and sturdy independence for which they were respected and admired.