‘Free Trade Could Help South’

Press, Volume CIII, Issue 30499, 22 July 1964, Page 12

‘Free Trade Could Help South’

(N.Z. Press Association) DUNEDIN, July 20. There was a strong possibility that a .Tasman free trade area could bring industrial development to the South Island on a scale that would make Auckland’s post-war growth seem tame by comparison.

This view is expressed in the latest .edition of the “New Zealand Industrial Register” in an article which points out some of the benefits of a limited customs union between the two countries. “New Zealand manufacturers cannot see many advantages in a Tasman free trade area—and they'can see

disadvantages. They cannot :herefore be expected to show much enthusiasm for the proposal and, in fact, are expected to oppose any extension of the scheme beyond the paper and car industries,” the article said.

“But conviction is growing in the South Island that far greater advantages could flow from the proposals than at first seemed possible. “The key to the growth was power—not political, economic or social power, but electric power. The south has it in abundance. “If Tasman trade barriers are lowered Australia’s big, power-hungry industries will want it. And to use it they

will establish multi-million pound industries in the South Island, especially Southland.” The article said that had there been even a limited Tasman customs union in force two years ago, there would be no doubt that Comalco would by now have started to build its aluminium smelter in Southland.

“Instead the company is awaiting progress on the free trade proposals—and if the picture is unfavourable it may well decide against Southland in spite of the fact that it would then need to use the much higher-cost power in Australia.

“Five other Industries, three of them bigger than Comalco, had investigated the prospect of establishing big factories in the south based on Manapouri power. “They have emphasised that establishment of these industries depends not only on cheap power, but ability to sell, tariff-free, on the Australian market. “What the South Island must now weigh up is whether the advantages of the establishment of such big industries in the south outweighs the risk to New Zealand manufacturing inherent in the free trade proposals,” the article said.