HER HANDS TIED

Evening Post, Volume CXVI, Issue 113, 9 November 1933, Page 22

HER HANDS TIED

AUSTRALIA AT OTTAWA

SLOW IN HONOURING PLEDGE

REVISION OF TARIFF

Are we carrying out our side of the Ottawa Agreement in a manner calculated' to encourage the continuance by Great Britain p£ our present advantages after the expiration of the five-year-term? I do not think we are, writes the Hon. T. L. Paterson, M.H.R., Acting Leader of the Australian Country Party, in the London "Observer." With few exceptions (such as wine and sugar, on which a preferential duty is imposed) Great Britain admits our produce free of duty, while taxing most similar goods from foreign countries. We enjoy this advantage over foreign competitors in the British market, and, apart from the natural handicap of distance, compete with the United Kingdom producer on an equal footing. In return for this we have undertaken to widen the previously existing margin of preference to British goods, to discontinue protecting unsound industries, and/to protect sound Australian industries only to a point which will "give United Kingdom produc ers full opportunity of reasonable competition." Great Britain is scrupulously carrying out her contract. Our undertaking was not quite so definite as Great Britain's, and left more room for difference of1 interpretation. With the tremendous tariff increases made by the Seullin Government, our representatives at Ottawa would have had an unparal' leled opportunity to make definite reductions to Great Britain, had fchei? hands not been tied by a foolish promise that no duty would be reduced till the industry concerned had been investigated by the Tariff Board. The in> creases had been made in most instances without recommendation by the board; nevertheless, they were to remain in operation till the board could slowly examine them one by one. Consequently the increased margin of preference to Great Britain, while promptly given, in most cases took the form-of. an increase of the already exorbitant foreign duties, British duties remaining where they were—on-a level too high to enable business to be done. Though working at high pressure, the Tariff Board, as at present constituted, with its limited numbers, will, require years to complete its task of revising the whole tariff in the light of the requiroments of the Ottawa Agreement, and downward revision must proceed with tortoise slowness so long as the Government refuses to iadd to the personnel of the board. , MORE DELAY. Further delay in giving effect to recommendations by the board for lower duties has been occasioned by the recent ratification of the Sculliri duties, which prevents reductions becoming operative immediately on being tabled in .the House, since validated items may not be reduced until both Houses have formally agreed, while increases operate instantly without discussion. . Recommendations of a skilled Tariff Board are naturally regarded as more likely to be sound than decisions > made in a political atmosphere with imperfect knowledge by a majority party in the House, but, nevertheless a Government wihch is a signatory to an agree-, ment with Great Britain cannot blindly accept recommendations of the Tariff Board which obviously conflict with that agreement. The Tariff Board has in many instances recommended 45 per cent.,duties against British gopds, and this is alleged ip conform po Article 10, in which we undertake that '♦protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis'of the relative cost of economical and efficient production, 6te." . / Disregarding for the moment the protective incidence of exchange and primagey and dealing only with the figure of 45 per cent, duty against British goods, equal to 49} per cent, on f.o.b. cost ; plus freight, surely it is plain ' that either the "reasonably competitive" level has been exceeded, or alternatively, the basis of manufacture in Australia is not "economical and efficient" where such a dutiy is required to raise British prices to a merely "competitive" level. It is impossible to accept duties of 45 per cent, and over against British goods aa conforming to Article 10. But, with exchange and primage as addi^ tional protective factors superimposed upon such high duties, Article 10 must be a dead lotter. . ' EXCHANGE AND PRIMAGE. • Sir Henry Gullett instructed the Tariff Board not to take exchange and primage into consideration when assessing the amount of duty required; and, even if the duty itself is a competitive one, the addition of primage and exchange frequently renders it prohibi-i tive. Pressed by the Country Party, the Government called for a report from the Tariff Board as to a practicable method of reducing duties so as to allow for the incidence of primago and exchange. The board presented its report months ago, but the Government has not yet taken any action* There1 is good ground for the belief that the board has recommended that a substantial deduction be made from existing duties partially to offset the additional protection afforded by exchange and primage, and any failure to carry out such a recommendation conflicts not merely with Article 10, but with Article 12 as well, since the latter requires us not to exceed Tariff Board, recommendations in imposing duties on, British goods. When one contrasts the lightning rapidity with which the preivous Government increased duties with the delay met with at every turn in reducing them, dt is obvious that the Government treads the path of downward revision of the tariff with unwilling and hesitating feet, despite the benefits which the agreement gives to a large section of our primary producers. There is in England today a growing demand for protection of the • home farmer against Dominion as well as foreign competition, Dominion produce to be taxed at preferential rates;.. There is another school of thought which1 endeavours "to "show that the Ottawa Agreements give all the advantages' *tO the- Dominions, that Great Britain gets little or nothing of value in return, and that Great Britain should in the future be free to give the advantages of the open port at present enjoyed by the Dominions to those countries —foreign or otherwise—which give the best terms to British export trade. If either of these courses were adopted by Great Britain, it would be to the detriment of Australian primary producers, and the second would weaken the. bonds of Empire. The Ottawa Agreement will permit of preferential duties being imposed upon Australian dairy, produce in little more than two'years' time; are we carrying out our part of the Agreement in a way which will render such action unlikely? Again I say Ido not think we are. .... '

The Petone and Lower Hutt Gas Lighting Amendment Bill was. introduced.in the House of yesterday, read a first time, and referred to the Local Bills Committee.