The press SATURDAY, JUNE 30, 1956. Imperial Preference

Press, Volume XCIII, Issue 28008, 30 June 1956, Page 8

The press SATURDAY, JUNE 30, 1956. Imperial Preference

Mr Ormond’s lamentations about the decline of Imperial preference at least had the virtue of honesty. He did not represent Imperial preference as a sacred bond of Commonwealth unity (which is the all too common humbug), but frankly and unashamedly as a protectionist device—and a one-sided protectionist device at that, as he did not suggest! that Britain sets the same high value upon it as he believes New Zealand meat producers should. This puts the question on the only plane on which it can usefully be discussed. And it is precisely because all the independent units of the Commonwealth are looking at Imperial preference from the viewpoint of self-interest that it is slowly but surely disappearing as a deliberate instrument of Commonwealth policy. This unmistakable trend is to be blamed neither upon the rules of the General Agreement on Tariffs and Trade, which are on the table for all to read, nor upon the machinations of some mythical and inimical financial power, a belief in the existence of which Mr Ormond seems to share with the Social Creditors. Imperial preference is disappearing because it no longer serves the purpose it was meant to serve—and did serve in the period of rising tariff barriers in the thirties—and because it cannot now serve the interests of the Commonwealth as well as other, different, policies. Most of the Commonwealth countries are, at best, lukewarm about it; and the only one that is really keen on it— Australia— wants it only if it can be modified greatly to Australia’s advantage. More fundamentally, Imperial preference is declining because it is not in the interests of the Commonwealth as a whole. A preferential tariff system encourages trade within the preference area and discourages trade between the preferential area and countries outside it. The statesmen of the Commonwealth—not some sinister power behind the scenes—have rejected economic exclusiveness, and with it reliance on entrenched or fortified Imperial preferences, for the good and simple reason that the Commonwealth is not a self-sufficient economic unit—unlike the United States, which is virtually self-sufficient, and the Russian Communist bloc, which is self-sufficient in the sense that it accepts a lower standard of living and compels its peoples to go without the things it cannot itself produce. No-one has seriously suggested that the Commonwealth might be prepared to accept such sacrifices, nor the yet greater sacrifices implied in a high-pressure attempt to make the Commonwealth self-supporting within, say, 20 or 30 years.

The Commonwealth, in short, must trade with the outside world in order to live, or at least to live in the comfort which many Commonwealth countries now enjoy and all aspire to. That is why all of them subscribe to the aims of G.A.T.T., which seeks to break down obstacles to trade everywhere. New Zealand could not reverse this process if it wanted to; but all through his address to the sheepfarmers Mr Ormond spoke as though the preservation of Imperial preference were something solely within New Zealand’s power to determine. Our privileged position in the British market is something Britain gives us, not the reverse. We have no “ rights ” there, “ traditional ” or otherwise, except the rights we earn by our ability to supply produce comparable in quality and price with that of our competitors. For better or for worse New Zealand must shape its external trade policy to the evolving Commonwealth pattern, which is a pattern of expanding multilateral trade rather than of Commonwealth exclusiveness. New Zealand should —and must—use its bargaining power, as well as the advantages of natural fertility and human skill that have made it one of the main food-producing countries of the world, to secure its position in the future. But as the bargaining in future will be done increasingly in international organisations such as G.A.T.T. rather than in the successor councils of Ottawa, the moral for this country should be obvious.