The Press SATURDAY, OCTOBER 10, 1964. The Protectionists

Press, Volume CIII, Issue 30568, 10 October 1964, Page 12

The Press SATURDAY, OCTOBER 10, 1964. The Protectionists

Whether secondary Industry in New Zealand should be protected has long been a dead issue; the only unsettled question is how it should be protected. New Zealand is one of the few democratic countries which protects its manufacturing industries by import licensing. Indeed, quantitative restriction of any kind, except as an emergency measure to protect the balance of payments, is a violation of the General Agreement on Tariffs and Trade. Other countries rely on the tariff, usually reinforced by emergency powers to prevent dumping of foreign goods on their home market. A tariff, in addition to the foreigner’s heavier freight costs, ensures that prices charged by domestic producers do not get too far out of line with those charged by efficient producers elsewhere. The additional security afforded the manufacturer in New Zealand has encouraged the growth of new industries, each requiring an allocation of overseas funds for raw materials and for equipment. As the policy of successive Governments has been to maintain full employment in New Zealand factories, an increasing share of export earnings has been used to finance imports of raw materials, at the expense of consumer goods. When consumer goods are finally squeezed out of the annual allocation of import licences, New Zealand manufacturers will have no imports to compete with; judging from the spate of price increases since the last wage order, this stage has nearly been reached. On most occasions the manufacturers as a body profess to dislike import restrictions. Occasionally the mask slips. A notable debate at the Industrial Development Conference in Wellington in 1960 gave the consuming public a glimpse behind the mask. The manufacturers wanted both import control and tariffs; the economists and exporters urged the abandonment of import control as a means of protection except in special circumstances. In Christchurch last week the mask slipped again. Provoked by one of their members who described import licensing as “ an umbrella under which the inefficient “ sheltered ”, delegates to the annual conference of the New Zealand Manufacturers’ Federation hurriedly closed their ranks. The resolution of the conference “ reaffirming federation policy in respect of the “ development and protection of industry and stress- •* ing the importance of quantitative import licensing " in this regard ” allows everyone to see where most manufacturers stand.

They stand for the right to exploit the local market, whatever the cost to the export industries which supply the funds for imported raw materials, or to the consumers who buy the products of New Zealand factories.