The Dominion. WEDNESDAY, MAY 9, 1934. THE JAPANESE TRADE CHALLENGE

Dominion, Volume 27, Issue 189, 9 May 1934, Page 8

The Dominion. WEDNESDAY, MAY 9, 1934. THE JAPANESE TRADE CHALLENGE

It is with manifest reluctance that the British Government has decided that the challenge of cheap Japanese goods to important Home industries must be met by import restrictions. In the statement published to-day the President of the Board of Trade makes it perfectly clear that it is ' hopeless to expect any results from negotiations, especially in view of the fact that Japan seems either unable or unwilling to offer any suggestions for overcoming the deadlock reached by the representatives of the two countries. The British Government is not yet prepared to go the length of denouncing the Anglo-Japanese Trade Treaty. It may come to that eventually.

What is proposed at present is to restrict the import of Japanese textiles, both to the United Kingdom market and to the colonies. But as both the British Government and the British public are well aware, Japanese trade competition is making its pressure felt in other classes of manufactured goods. It is therefore quite within the bounds of possibility that, unless some kind of compromise between the two nations is reached, the area of the trade war will be extended to the point finally that the present Trade Treaty will not be worth its face value. It is difficult to believe that Japan could contemplate with indifference the loss of the valuable export trade market in Britain and the colonies, which she has been exploiting with such remarkable zeal and success during the past few years. To her apprehensions on that score may be added a feeling of resentment. But there is the further contingency that the British overseas Dominions, actuated in their own interests by a desire to support United Kingdom manufacturers as an essential basis of reciprocal trade relationships, may adopt a similar policy. Concern has already been expressed by representatives of the textile trade at the new situation opened up by the influx of cheap Japanese goods. Some people complain that the exchange rate and the sales tax make- it difficult for New Zealand importers of manufactured goods to sell these at a price which might offset the cheap Japanese stuff. To this the reply must be made that even with no exchange rate or sales tax, and with an import duty for the purpose of loading the Japanese article, it could still under-sell the .British. A prohibitive duty would simply amount to' a ban on imports. Assuming that some such policy may have to be pursued by the Dominions, the cumulative effect of these measures upon Japanese sentiment might conduce to an unhealthy tension in the relationships between the two Empires. One quite possible result would be the denunciation by Japan of the open door policy in China, which would bring the Powers face to face with a first-class international crisis.