PROBLEM OF IMPORT OF CHEAP EASTERN GOODS

Press, Volume XCIV, Issue 28158, 22 December 1956, Page 13

PROBLEM OF IMPORT OF CHEAP EASTERN GOODS

While the Minister of Industries and Commerce expounds the theory of

“hard core” industries as a successor to the “economic” and “worthwhile” factories of the past, a codlin worm in the shape of imports from low-laoour-cost countries is eating into that very same core to cause damage to the fruits of New Zealand’s manufacturing endeavours, says the “New Zealand Manufacturer.” the journal of the New Zealand Manufacturers’ Federation.

The journal says that fresh attention to the problem of imports of cheap goods from Eastern countries enjoying British preference was drawn recently by a press controversy over the importation of 500.000 dry-cell batteries from Hong Kong which sell for little more than half the price of New Zealand batteries. While the manufacturers of dry-cell batteries were able to compete with batteries from the United Kingdom, neither they nor the United Kingdom manufacturers could meet competition from the factories of Hong Kong, where labour costs are low and working hours long. “It is not a new story, but the case of the batteries serves to emphasise the problem afresh,” says the journal.

“New Zealand enjoys a high standard of living, with high wages and short hours of work. Its industries cannot

compete with those of low-cost countries unless costs are at least equalised by tariff duties or unless quantitative controls operate. The Government has repeatedly stated that the necessary protection will be provided, but in practice, where it removes import controls, it frequently exposes fresh industries—such as the dry-cell battery manufacturers—to competition that cannot be met. While it must be recognised that New Zealand has to trade with such countries, it is essential that adequate safeguards are provided. (In the case of Hong Kong New Zealand buys four times as much from the Crown Colony as she sells to it.)

“If the Government fails to realise the dangers inherent in lifting further import controls without tackling the problem of low-cost British preference countries, its actions could channel to this market the products of Hong Kong factories already making vast quantities of cheap textiles, clothing, footwear, plastics, rubber goods and light metal products, to say nothing of the potential output of other lowcost countries that are being industrialised. It could be pointed out that the United States has no illusions about adequate tariff duties; it imposes tariff duties of up to 110 per cent, to protect its industries from Eastern competition and sets an example that New Zealand could well follow,” the journal says. “The New Zealand Government faces the alternatives of retaining quantitative controls or of having Article 12 of the Ottawa Agreement amended to enable adequate tariff duties to be established in the case of low-cost countries at present enjoying the same preferences as the United Kingdom. “It is time for a realistic approach to be made to the problem both by the Board of Trade and by the Government. The codlin worm of imports from low-labour-cost countries should not be allowed to eat into the core of New Zealand industry and affect the confidence and morale of manufacturers.” concludes the journal.