FRENCH TRADE WITH NEW ZEALAND

Press, Volume XCVI, Issue 28354, 13 August 1957, Page 9

FRENCH TRADE WITH NEW ZEALAND

WELLINGTON, August 11 Though it has been answered ministerially and explained by the French Ambassador to New Zealand, Mr de BercegoLde Lile, the Ambassador's hint that unless New Zealand buys more French products France may cut imports of New Zealand wool is still causing indignation in trade and official circles. The reason for this is that the French stone has been thrown by the owner of the most vulnerable glasshouses of all in the international conservatory of restrictive trade practices. In the discussions to take place in two months as a background to the next meeting of the signatories of the General Agreement on Tariffs and Trade it is France that will be under fire from New Zealand and other countries because of restrictive practices. Like Western Germany, France has adopted the system of allowing free entry to the agricultural products of some countries while heavily restricting Some New Zealand products. This system was examined by the recent New Zealand trade mission to the United Kingdom. It noted, for Example, that while New Zealand butter was selling at 3s 2d a pound in London stores, the price of domestic butter in France was something more than 6s a pound. In his reply to the French Ambassador, the New Zealand Minister of Industries and Commerce (Mr E. H. Halstead) did not mention this point. His reason for not doing so was probably a diplomatic one. New Zealand orders for heavy machinery, notably for railways and hydro-electric equipment, are open to competition on the world market. The tenders are widely advertised, and it has been the practice for the lowest tender to be accepted, whether it comes from France, Czechoslovakia, or Sweden. Some public servants believed that contracts could be used to gain, entry to foreign markets. Generators and rail-cars would be bought from countries which would admit New Zealand butter. It is likely that New Zealand will revise its trade policy shortly to reduce its disadvantage on the Continent. A group of experts is studying the trade position and a Ministry of Trade may be created. Mr de Bercegol’s main trouble is the restrictions on French cars. Misconceptions arising from his statement continue in spite of Mr Halstead’s reply. One was aired in Parliament this week by the member for Tauranga (Mr G. A. Walsh), who argued that last year France paid £19,000,000 for New Zealand wool, while New Zealand bought French commodities worth only £2,000,000. His misconception was that “New Zealand has a wide market for her wool pro-

(From Oh, Own Reporter:

ducts in France.’* This impliet. of course, that France buy* ril this New Zealand wool for its own consumption, and thus has a strong claim for reciprocal treatment The actual position is not so simple. For centuries France has been a leader in banking and finance. Much buying for international organisations is done in French currency and through French banks. A large part of the £19,000.000-worth of" New Zealand wool does not stay in France, and does not go into material bought as an end product by the French consumer. There is nothing unusual in this practice. Britain follows it ex- , tensively. Much New Zealand . butter, bought in Britain in recent years has been placed finally in other countries. Czechoslovakia has bought some millions of . pounds' worth of New Zealand . butter in this way. The business I raises the question of which coun- • try should reap any reciprocal ’ trade benefits—the entrepot trader or the final consumer! > French banks are the working ■ bases of a great amount of "hot’* . money, so-called because it is used > in quick transactions based on in- ■ ternational tensions and appreheni sions. Much of this money be- : longs to Lebanese and Greek trad- ; ers who traditionally bank in s France and. trade io commodity , futures. At a time of inter- - national unrest, they naturally \ . deal in such items as wool, which s are likely to appreciate in value, j It is not likely that the French . Government would find it exf pedient to prevent the acquiris tion of New Zealand wool by such , speculators. e e