Secret Agreements Review

Press, Volume CI, Issue 29742, 8 February 1962, Page 12

Secret Agreements Review

The summaries of the nine agreements made for the establishment of new

industries or the extension of old ones in New Zealand are in fairly general terms but should be adequate to show those directly con-

affected. Though all appear to be more sensibly drawn than the cotton mill agreement, their whole purpose is to give the successful companies a privileged position. Some of them include the bad principle of a “definable” share of the New Zealand market, a

proposal rejected by the

industrial development conr ference, in which the Labour Government tooK pride. What was the point of holding the conference if no notice was to be taken of its opinions? Another doubtful point in some of the summaries is that they do not make it plain whether the price margins allowed above the prices of imported articles are to oe calculated before or after the calculation of customs duty. It would surely have been more straightforward to include the whole price margin in the protective duty. Or is the price margin merely a concealed addition to the duty? As in the cotton mill agreement (though without the binding assurances given in that), the Government undertakes to use an objectionable combination of import control and tariff protection to support some of the nine industries. The Minister of Industries and Commerce (Mr Marshall) said in his introductory comments (and some of the agreements so provide) that import control should be used only in special circumstances, such as the dumping of goods by overseas competitors. That was another (and quite specific)

recommendation of the industrial development conference that the previous Government chose to ignore. Much is sometimes made of the employment provided by new industries. The nine industries covered by these ill kntra cinltr a marginal influence on the labour market, providing jobs for about 1500 persons —a tiny proportion of the labour force to warrant so much fuss.

One redeeming feature of the worst of the agreements is that they apparently do not have the indefinite currency of the cotton mill proposal One, in fact, covering the manufacture of telephone cables, provides for the termination of the agreement at any time after 10 years Another point is that they do not purport to bind the Government firmly and the contracting companies loosely. Price control is clearly established in most of them, while the Government is only asked (in the terms of the oil refinery summary) “to consider “ favourably taking steps to “ protect the company’s “ products ”. That is a reasonable approach. Though some of the agreements should have been made differently and given earlier publicity, the impression conveyed by the summaries is that the Government is right at this stage in deciding to let them stand. It is, however, impossible to be sure of that until the implications have been fully examined by trade and commercial circles. Publicity and criticism will at least have the effect of putting future politicians and public servants on their guard against lightly making similar agreements and against concealing the obligations placed upon future Governments.