COMMERCIAL N.Z.-Aust Trade Gap Could Narrow $44m

Press, Volume CVIII, Issue 31653, 13 April 1968, Page 16

COMMERCIAL N.Z.-Aust Trade Gap Could Narrow $44m

(N.Z. Press Association—Copyright)

SYDNEY, April 12. It is estimated that in 1968-69 Australian exports to New Zealand will fall by s24m and that New Zealand exports to Australia could increase by s2om.

This is outlined in the W. D. Scott and Company economic advisory service in its 1968 management guide to the economies of Australia and New Zealand.

In the section devoted to Australia-New Zealand Trade, W. D. Scott and Company says that in the short term, and particularly the year 1968, a significant increase in New Zealand’s exports can be expected as a result of the drop in New Zealand prices. Australian exports to New Zealand will diminish because of the stronger competition Australian industry will meet from United Kingdom exporters.

The trade disadvantage for Australia stems from its decision not to devalue its currency, while the United Kingdom devalued sterling and New Zealand brought its dollar down to a parity with that of Australia. W. D. Scott’s survey continues: “The British competition will be modified by increases in freight rates, and in price rises, which devaluation may impose upon British production costs.

“On the assumption that no price rises either in freights, or in production costs would occur, and assuming a British supply capacity, Australia would lose about 35 per cent of the export trade to New Zealand. “It must be assumed that the Governments of both countries will endeavour to broaden the Australia-New Zealand Free Trade Agreement so that the Governments of the two nations can become more complementary.” The survey notes that while commodity trade will be affected, invisible balances may be changed even more: the devaluation of the New Zealand dollar will doubtless attract many more Australian tourists to New Zealand, and will tend to curb the flow of New Zealanders to Australia. Steel Industry W. D. Scott comments that the establishment of a New Zealand steel industry to begin production in 1968 will in future years reduce considerably iron and steel imports from Australia.