Trade with Japan

Press, Volume XC, Issue 27339, 3 May 1954, Page 8

Trade with Japan

The line which divides New Zea- ’ landers who favour freer trade and ■ those who want protection was drawn sharply last week in an unexpected place—the annual conference at Hanmer Springs of the Associated J Chambers of Commerce. The ! delegates, as might be expected, • eventually adopted a remit urging ! the Government to “ keep constantly

“in mind” the desirability of reciprocal trade with Japan, but only after they had listened to the usual protectionist objections to the importation of goods from a country

with a lower standard of living than our own. The surprising thing about

this debate was that business men t should question the desirability or ? even the necessity of importing from t a country which is a very good I customer for our exports of primary ’ produce. Mr L. N. Ross, of Auck- 1 land, who suggested that the < chambers’ support of multilateral 1 trade should prohibit their endorsing < a bilateral trade agreement with 1 Japan, certainly did not show a way > out of this dilemma, unless it was ■ the wholly impracticable one of ! expecting other countries, out of ’ their favourable trade balances,, to ■ ! bridge the payments gap between ‘ 1 Japan and New Zealand. For the 1 time being, at least, and for the protectionist reasons which seem closer to Mr Ross’s heart than any ■ abstract question of international ! trading methods, New Zealand has ! denied itself any relief of this kind; - for it has refused to take part in the arrangements made by some countries to give Japan, pending its » accession to the General Agreement on Tariffs and Trade, the advantage • of trade arrangements made under I the agreement. There is certainly - no reason to believe that the protectionists would rather have Japan as . a full nwtner in G-A-T.T. than as

the second party to a bilateral pact. There need be no regrets that the facts of international economics compel New Zealand and the rest of the Commonwealth to try to bring their trade with Japan more into balance. In five years New Zealand has exported to Japan more than £ 12,000,000 worth of goods, and lias admitted only £7,700,000 worth of Japanese exports. Last year Japan, with a deficit of £100,000,000 in its trading accounts with the Commonwealth, was forced to curtail its imports from the sterling area very severely. The trade agreement recently signed by Britain and Japan represents an attempt to correct this disequilibrium in the only way that it can be corrected without grievous harm to the Commonwealth countries that export to Japan. ' A balance could have been struck at a much lower level, which would have meant further restriction on the Japanese buying of Commonwealth raw materials. The decision to try to balance JapaneseCommonwealth trade at a level slightly below that of 1951-52 was the wiser course on all considerations, as the expansionist rather than the restrictionist solution is almost invariably the more advantageous in the i long run. Britain philosophically accepted—although with some grumbling from Lancashire—the provable consequences of increased competition from Japan in its hitherto protected colonial markets; and it is probable that no New Zealand industry that is likely to be affected by Japanese imports will be subjected to competition as intense as that threatening the British textile industries. Japanese industry, wiih the single exception of textiles, is by no means as efficient or as competitive as the protectionist interests in other countries fear—or pretend to fear. Japan has a long way to go before it recovers from the effects of-the war upon its once prosperous industries; and Japan’s economic wellbeing must be for a long time an important and anxious factor in the Western countries’ hopes for [stability and peace in Asia and the Pacific.