The Ottawa Agreement

Dominion, Volume 29, Issue 225, 19 June 1936, Page 13

The Ottawa Agreement

Sir, —There seems to be a somewhat general assumption that because at Ottawa'England would not make separate agreements with individual Dominions, she will take the same course at the next conference. This assumption seems to rest on a frail foundation, for it takes no apparent account of the altered position. The Ottawa Conference was one of the greatest experiments that England has ever undertaken. And not even the greatest authorities could confidently predict how its conclusions would work out in practice. To-day we know, and England knows, she has kept her part of the agreement fully, as she always does. Australia and New Zealand lost little time in breaking important parts of theirs. Australia has doue so on one point, and New Zealand, I am sorry to say, on two. Australia did not put on the rate of exchange tax (for a tax it is), because she had already depreciated her currency some time _ before the conference. But by promptly putting a prohibitive tariff on English manufactured goods, she broke her pledge that these goods should be able to enter, the country at a fair competitive price. That tariff is still in force. 'There are signs that before Jong it will be lowered, but none that it will be brought honestly within the terms of the agreement. New Zealand has broken her pledge in two respects. At the dictation, apparently, of the Bank of New South Wales, which governed our late Ministry, and seems also to govern our new Ministry, she put ou the exchange tax,.and the Savage Ministry is breaking its preelection pledge to take it off. New Zealand has also broken her pledge of allowing English manufactured goods to enter at fair competitive prices, for Mr. Coates’s so-called revision of our tariff was and is a" sham. Even to-day, about 25 per cent. Customs duty has to be paid on two articles that are health necessities, to quite a number of people, but neither of which can be made here, because we have not the materials nor the secret knowledge of how to make them if we had. Considering, then, England’s present and dearly acquired knowledge of how Australia and New Zealand fulfil their pledges, it seems likely that she will now make separate contracts with individual colonies. I am not concerned as to how she will deal with Australia. How will she treat New Zealand? Mr. Nash will go Home with one certain knowledge, and that is that the Home Government will ensure that the Home farmer shall be able to sell all his (increasing) produce at a fair payable price, free from any risk of undercutting or a glutted market. The first part of this will doubtless be arranged by a levy to safely offset the exchange tax and guaranteed prices. And the second will be met by a quota. I hear that many farmers who have never touched dairying before are now devoting some of their land to it as a sideline. This, if the next season is an average good one, will mean a material increase of production for export, and glutted markets at Home unless a quota is put on. Why the Government has not carried out Labour’s pre-election pledge to abolish the exchange tax I, of course, do not know. But from Mr. Savage’s latest mysterious hint it would seem that Government finance is already in an embarrassed state. Tiiirt position has been reached somewhat earlier than was generally expected, but is not altogether surprising when one remembers the huge railway commitments made by Mr. Semple at the beginning of the year. Mr. Savage is dealing Mr. Nash a very poor hand to take Home with him. There is not a single trump in it. Clever, persuasive and soft-spoken though he be, Mr. Nash has, on present materials, an impossible task before him. England will not trust to mere promises this time. She will want to be presented with accomplished facts, such as a definite start of the scheme for a quick reduction of the exchange rate already sketched in your columns, and a definite honest revision of the tariff against England. And the sooner these two steps are taken the better, for if delayed they will be discounted as death-bed repentances. Revision of the tariff will not call for another tariff commission. All that, has to be done—by Order-in-Council, I presume—is to put all English manufactured goods that cannot be made here on the free list, anti reduce the tariff on all other English goods to “fair competitive rates.” —I am, etc., SQUARE DEAL. Wellington, June 17.