New Zealand-Australian Trade

Press, Volume CI, Issue 29747, 14 February 1962, Page 12

New Zealand-Australian Trade

The Australian Govern-

ment’s decision immediately

to increase the tariff on imports of New Zealand

onions has given rise to further resentment in this country of Australian discrimination against New Zealand products. Last year, after the Australian authorities had approved imports of surplus New Zealand potatoes to ease a shortage, pressure from trade interests led to the invocation of quarantine laws under which the New Zealand potatoes were subjected to expensive (and, in the view of New Zealand growers, unnecessary) cleansing and desprouting treatment. This made the immediate transaction unprofitable and discouraged hopes of a regular trade in potatoes with Australia. The decision about onions is not regarded by the Minister of Overseas Trade (Mr Marshall) as specially reprehensible. He considers the sliding scale of duties more equitable than a flatrate duty as a means of giving reasonable protection to the Australian grower while still allowing opportunities for a legitimate New Zealand trade. However, the substantia] disadvantage of the new type of duty is that it discriminates against the supply of cheap onions to the Australian consumer, the higher the f.o.b. price, the lower the duty. A more anxious question is whether the Federal Tariff Board will regard this as a precedent for tariffs on other commodities.

The Australian action has called attention to the question of New ZealandAustralian trade relations as a whole, which has always been bedevilled by the Dominion’s chronic adverse balance. A few years ago a New Zealand High Commissioner to Australia was most outspoken

about “ difficulties and ob- “ structions ” that were being encountered by New Zealand firms trying to build an export trade with Australia. The New Zealand authorities should certainly be alert to resist unreasonable impediments to our exports to Australia or any other country; but the question of balancing bilateral trade is quite different. New Zealand buys many commodities from Australia because it suits it to do so. As Mr Marshall pointed out when the question was raised a year ago, New Zealand could buy elsewhere, at a higher price, some of the commodities it buys from Australia. The effect would certainly be to reduce the gap in trade between Australia and New Zealand; but it would be poor business for New Zealand. The important consideration is that New Zealand should balance its over-all trading. Indeed, an increasing number of far-seeing persons are becoming convinced that what both countries should be seeking is the establishment of free trade between them. A recent visitor, the Premier of Victoria (Mr H. E. Bolte) returned to his own country an advocate of an economic alliance between Australia and New Zealand. Mr Bolte pointed out that both countries. having primary products to market, would do it better jointly than separately. This opinion supports economists’ views that in the long view both Australia and New Zealand stand to benefit by jointly seeking solutions to the problems that face them in a rapidly changing economic world While giving due attention to such immediate issues as the onion tariffs. Mr Marshall should, when he visits Australia to discuss trade later this month, be more concerned to see that transTasman trade is viewed in broar perspective.