Wool Trade And Talk

Press, Volume CVI, Issue 31195, 20 October 1966, Page 16

Wool Trade And Talk

While there are good arguments against the system of protecting New Zealand industries by import control, a threat of reprisals by a trading partner is not one of them. There is at least a veiled threat in the statement by Mr J. K. Milner, leader of the United Kingdom trade mission to New Zealand, that “ any further closing of the door to the trickle of “British yams currently allowed into New Zealand “ will have a very much more seriously marked “ impact on our buying policy in New Zealand than “ the actual restrictions might warrant ”. Mr Milner does not acknowledge, in his reported statement, that New Zealand imports of light-weight worsted woollen fabrics have recently been freed from licensing. This decision will surely lead to a sharp rise in imports of these fabrics and to a perceptible displacement of artificial fibres by woollen fibres in the New Zealand market. Whether Bradford takes advantage of this market opportunity is Bradford’s business, not New Zealand’s; but any criticism by Bradford interests of New Zealand’s import licensing policy should be based on all the relevant facts, not merely the grievances of one section of the wool trade. Mr Milner’s threat is not only unjustified; it is probably empty. New Zealand imported, in 1965-66, little more than 500,0001 b of wool yams, worth less than £500,000; our exports of wool totalled more than 611 million lb (£ll6m), of which some 140 million lb (£27m) was shipped to the United Kingdom. Very little of the New Zealand wool shipped to the United Kingdom is destined to be shipped back to New Zealand in the form of yarn; most of the United Kingdom yarn production is sold to United Kingdom mills, New Zealand being only'a minor export market. New Zealand is thus an insignificant market for British yams but a major source of supply of raw wool to British mills. By the same token. New Zealand woolgrowers are more dependent on the United Kingdom market than on any other—unless the European Economic Community, which now buys 70 per cent more New Zealand wool than the United Kingdom, is counted as a single market. Even so, the cessation or curtailment of British buying on the New Zealand market would have a much less “ seriously marked impact ” on auction prices than might be imagined. World supplies of the crossbred wools produced in New Zealand are limited, and the United Kingdom would have to outbid other buyers in South America and South Africa to make good their deficiencies of New Zealand wool. The other buyers—from the E.E.C., the United States, and Japan—would then be forced to buy more of their requirements in New Zealand.

New Zealand’s restrictions on the import of wool yarns are, no doubt, irksome to a section of the wool trade in the United Kingdom; but is that sufficient cause to suggest that a much larger section of the trade should divert its purchases from New Zealand to another supplier? Or would Bradford merely be cutting off its nose to spite its face?