QUOTA FOR MANUFACTURES

Evening Post, Volume CXVII, Issue 109, 10 May 1934, Page 10

QUOTA FOR MANUFACTURES

Application of the quota to textiles is a new protective, measure for the United Kingdom, but other nations have already tried, the system. I Russia with her national buying and , France with her quota which caused friction with Britain are the most outstanding and recent examples. Reduction of imports of manufactured goods has also been brought about, but in a less orderly way, by other ■ countries through exchange restrictions. In many Continental and South American States, for example, trade has been limited by the ■ inability of buyers to effect payment. Though the importers might be solvent they could not transfer funds ,to the exporting countries. But such regulation is rough-and-ready, even where concessions were made in per--1 mining transfers of money. They are hastily devised emergency measures, coming in the same''category as the embargoes and prohibitive duties imposed by Australia in the early days of the exchange crisis. The quantitative regulation now to. be applied by Britain proposes no such complete exclusion, but distribution of the trade according to the ascertained proportions of the five-year period 1927-31. This will leave Japan with that share which she enjoyed before the depreciation of the yen; but will make dumping 'or 'further depreciation ineffective as a means of .increasing sales. Mr. Runciman's statement does not indicate how the quota is to be worked in the distribution of the cheap imported textiles, but we may assume that a pool will be arranged so that' imports will %be spread evenly over the buying market. • ,

A quota on manufactures presents no greater difficulties Jn this respect than quantitative regulation of raw material or food imports. Considered from the standpoint of world economy it is even more justifiable than a raw material quota, since it tends to remove the inequalities of trade which arise from differences in living standards. The raw material quota, on the other hand, cancels out natural advantages of climate and soil. It is yet to be seen whether Japan will accept the restriction in this spirit. The early comments.suggest that Japanese manufacturers are not greatly disturbed because they consider that it will be less effective than Britain hopes. On the other I hand the statistics quoted yesterday show that United Kingdom and colonial imports of .textiles have inI creased greatly since 1927-31, and that adoption of that,period as the quota starting-point must mean a substantial reduction. Japan will, however, continue to sell as,formerly to the Dominions unless they. follow Britain's example with quotas of their own. Will the Dominions follow? Australia is the most doubtful case, for Australia has a good market iri Japan, and does not wish to lose it. References to Australia's antiJapanese attitude, for protection of her own manufactures, not Britain's, has led Australia to become anxious concerning her wool market. .■So.Mr.Latham has gone to Japan on a goodwill mission, and has begun his tour just as Mr. Runciman has thrown his quota bomb. Mr. Latham has begun well in his fencing with a sm,all army of interviewers. Awkward: questions he has avoided, arid he has:rnade it clear that his good-will mission will not be spoilt by the-ill will which might easily be created; through blunt answers to the blunt questions put to him. But the difficult part of the interviewing has yet to come. Will Mr. Latham be able, to maintain the good-will spirit when he is asked Australia's intentions on quotas? It depends what use Japan is prepared to make of her wool-buying custom. Does she want to buy. Australian wool as much as Australia wants to sell it?