NEW CONDITIONS ARRANGED

Evening Post, Volume CVIII, Issue 80, 1 October 1924, Page 9

NEW CONDITIONS ARRANGED

PROTECTION AGAINST FOREIGN

LABOUR

EMPIRE WORKMANSHIP MUST BE

75 PER CENT.

A statement on the subject of British preference was made in the House of Kepresenatives yesterday by the Minister of Customs (the Hon. W. Downie Stewart). At present an article partially manufactured in a foreign country is entitled to tariff preference if 25 por cent, of the factory or works' cost of the finished article represents expenditure in Empire material and labour.

It is now intended, in line with Australia, to provide that goods shall not be entitled to be admitted under the British preferential tariff unless they contain at least 75 par cent, of British material or labour. The full statement of the Minister was as follows:—

" The Government has had under consideration for some time the conditions under which preference is granted by the New Zealand Customs Tariff to goods manufactured or produced in the British Empire. An article partially manufactured in a foreign country is entitled to tariff pereference if one-fourth of the factory or works' cost of the finished article represents expenditure in Empire material and labour. It is felt that this condition is too easily complied with, and that articles of an essential foreign character are treated as British for tariff purposes when only a comparatively small part of the manufacture has taken place within the Empire. When articles thus, qualify too" easily for tariff preference the result is likely to be prejudicial not only to manufacturers m other British countries but also to those jn the Dominion itself.

HOW PRESENT REGULATIONS

. WORK. " So far as Empire industries outside New Zealand are concerned, an illustration of the possible working of the present regulations may be seen in the case of motor-cars. The chassis, which may be considered as the really important part of the car, may be made in a foreign country. Suppose it costs £150. By the addition to it in England or Canada of a cheap body costing as littlo as £50, making the total cost £200, the complete car qualifies for tariff preference. On the face of it, though' United Kingdom or Canadian, body builders may reap some benefit, the effect must be prejudicial to British chassis builders as well as to competing New Zealand body builders, who, if they import foreign chassis, are charged the highest rate of duty leviable under tho tariff.

" Another illustration of the effect of tho present system may be given. If military hair brushes are made in France and packed in England in British leather case, they aro at present entitled to preference if the leather case represents 25 per cent, of the factory cost of th» complete article. "So far as New. Zealand industries are concarned, tho fact that our own manufacturers are prejudiced by the present regulation is illustrated by the case of the manufacturer of motor-car bodies referred to above, and by many similar instances, of which the following will servo as an example:— " New Zealand manufacturers hay» to pay duty on foreign writing paper which they use in making ■ envelopes writing pads, etc. The British manufacturer obtains the same foreign matorial without having any duty, and envelopes, pads, etc., made therefrom qualify under present conditions for tariff preference. Tho finished article in many cases is thus admitted to New Zealand at a rato littlo higher than that charged to tho local manufacturer on tho raw material. It is expected that tho amendment proposed hereafter will largely remedy tins. " The preference policy was first adopted in New Zealand in 1903, and in 1904 tho 25 per cent, basis, now proposed to be altered, was brought into force. Iho number of classes of articles on which preference was granted was increased in 1907 and 1917, and further extended in 1921, and the 25 per cent qualification has been in force during all those years. *

THE CERTIFICATE OF ORIGIN.

' In considering an alteration, tho Government was laced with tho initial difficulty that in 1921 New Zealand was a party to a Customs Conference hold in London with a view to adopting a uniform form of certificate of origin on invoices for all the Dominions. Prior to that conference each Dominion proscribed its own form of certificate, and although similar in essential particulars, the varyjng forms caused much confusion to British manufacturers, who had to give the particular form of certificate required by each separate Dominion. It was partly to overcome this difficulty that tho conference took place. The Governmont was loath to disturb the present arrangement, as so long as Now Zealand alone desired to make an alteration, but when it was found that the Australian Government was also anxious to alter the existing basis, it was thought that tho • whole position as it exists at tho present time should be fully gone into. In considering what alteration should be mads account had to be taken not only of its probable effect on the industries of New Zealand but on those in Great Britain and in the other British Dominions. It is most desirable that one form of certificate of origin should be adopted for Australia and Now Zealand, and, if possible, for tho other Dominions. '

UNIFORMITY OF ACTION.

" Tho Government has been in close consultation with the Australian Government, which is anxious to adopt the 75 per cent, basis, and looking to the interests of New Zealand and with a view to unifemity of action on the part of both Governments, it has been decided to amend the present basis of 25 per cent, and to provide that goods shall not be entitled to bo admitted under tho British Preferential Tariff unless at least 75 per cent, of tho. factory or works cost is accounted for by British material and/or labour, with the exception that where goods are made in Rritish possessions wholly from unmanufactured raw materials of foreign origin, such goods will lie regarded as qualifying for preference. Jt is possible that actual experience <if the new system may show that the 75 per cont. basis is too high, and in such caso the matter will be reviewed, but not until it has been .in force a sufficient length of time to judge its effects.

" Both Australia and Now Zealand have agreed to delete a condition which, in the opinion of the Government, is somewhat contrary to the principles'underlying a preference policy. The provision is as under: 'In 'the case- of goods which have at .-,01110 stage entered into tho commcrcQ of or undergone a prcjcr.a.-! of ntiiMufttclui'tt in n CoreiKii uuuulry, oitfy that labour *uil material

which is expended on or added to the goods after their return to British possessions shell be regarded as the produce or manufacture of British possessions in calculating the proportion of British labour and material in the factory or works cost of the finished article.'

NO AMENDMENT OF LAW REQUIRED.

"It is proposed to bring the new conditions into force in New Zealand with respect to goods imported or entered for home consumption, on and after Ist April, 1925. The alteration can be made by Order-in-Council without any amendment of the existing law, and therefore no alteration to the Customs Acts will be required. The amending regulations cannot, however, be issued until the new form of certificate of origin has been agreed upon. The Commonwealth cannot see its way to adopt in every detail the s policy set out above, and before a uniform certificate can be arrived at it will be necessary for the Customs Departments of the two countries t 0 agree upon the,details. It may, therefore, be some little time before the regulations can be gazetted, but it will be arranged that until the Ist October, 1925, the form of certificate gazetted on 7th December, 1922 will be accepted provided that the word 'one fourth in paragraph 6 (b) ig amended to read 'three-fourths.' The Hieh GonimisßKHier for New Zealand, the official representative of the Customs department in New York, and the Government agents in Sydney and Melbourne will be immediately advised as W the proposed alterations."