STATE OF FLUX

Evening Post, Volume CXVIII, Issue 9, 11 July 1934, Page 6

STATE OF FLUX

ECONOMIC CONDITIONS

INFLUENCE ON TARIFF

. The importance of taking into consideration world conditions was stressed by Mr. Coates,; who' referred to the following .extraefc^fronio the ■'■' Commis; sioii's .; reconimenaatioris in the present'x^port.are/basccl on the assumptionv that-fhe :present woria depression, anidAthe^ trading; restrictions arising pe'culiariy'out of it, will pass, and thatiwdrl'd economic'.life'and international trade, will be restored in subr stantially tho same £orm, and governed, by substantially the ,same principles as prevailed before.: the depression." .'''l-quote this not to call it in quos-. .tion or _ to_ wproyoke a debate on it, though it Jsta paragraph which could provide: ample material for -. usefnl discussion," said .the Minister, "but I mention it to illustrate the fact that there are factors, of .pressing importance which must be taken into account when we are considering these matters, and factors which by the nature of things could not have been within the contemplation of the Tariff Commission when it was sitting. "It is impossible to consider the tariff .without having regard to -world conditions and the alterations which have taten place during recent years in the commercial aiid economic policies of the United. Kingdom and the other principal tracing nations of the world..' The .most striking characteristic is the development- of a policy of nationalism based on the idea of more self-sufficiency. "With this object in view, one -nation after another has adopted devices by which trade is regulated to a much; greater oxtent than obtained before the period of world 'lepressioii. TOWARDS NEW ORDER. "The world .is in a state' of flux. Changes of perhaps far-reaching nature are taking.place before our eyes. Everyday, the probability of restoring the old pie-war world grows more remote. It is an inescapable fact that wo are nioviug on towards a new order. As to precisely what'that order will be none of us can honestly pretend to be' dogmatic. We can only do our best j to keep ourselves informed of the trends and to keep in step with developments. -

"For the purposes of the Tariff Conimissi.on's report, it,was, of course, impossible' that they' shonld foretell the future course of events. They could not, any-more than- any of us can, safely assume that this or that change will be permanent. Instead, they did tho useful and honest thing, as I have shown in the quotation from their report, of making perfectly clear and explicit to themselves and to others the assumption on -which the report is based, and it is the simple assumption that international trade will return to substantially its former condition. '

"It is..well-that this assumption should be made clear. And it is important to"say, that its corollary is that,

■to..the extent.that it does not prove to v b.e warranted, we may, and indeed must i Insbme instances, review some- specific! recommendations. Again, in sayin<» .this;,!, make .it- clear: that, except to the extent' that can be'clearly shown to bo, warranted, we will/adhere to tho recommendations'of tlie'Commission. . EXTERNAL .TRADE. : "New. Zealand, although a country with a relatively small population has a very, large external trade, upon which it is, vitally dependent to discharge its external obligations' and to carry on its national life.; The tariff, therefore, must be.considered not only from the. point of view "of encouraging production for local consumption, but also of developing markets abroad for our exportable surplus. .Another and very important matter which must be borne in mind when our tariff is under review is the. revenue required to carry on the government of the country. "The main.aspects-of bur fisearpolicy can therefore be dealt' with under four' heads:"— ;■.■>.. \" \ ' 1. Tlie development of; local industry. 2. The maintenance and extension of markets for our products. ,3. The encouragement of iiitv^Empire trade. > . • ■-■■ '; ■„■'-, 4. The obtaining of revenue. "In at least' two important respects the present revision of the tariff is undertaken under, conditions different from those which-existed when previous alterations have taken place, viz.: (a) The Ottawa Agreement of. 1932; (b) the world-wide depression in. trade.and industry .through, which practically all nations are now passing; and (c) the necessity of obtaining.new markets for our exports , and maintaining existing markets. These factors are necessarily taken into consideration' when reviewing the whole problem. . ; GOVERNMENT'S POLICY. '.. "The policy of the Government with reference to the tariff- may be stated as under:— 1. Development of local industry:— (a) To accord protection only ,to those industries regarded as suitable to New Zealand; ■■'■■• (b) To grant protection only to the extent necessary to enable local industries to function, efficiently; (c) To; give effect to the Ottawa Agreement so far as Prelates to the New Zealand tariff; (d) To givo employment to our people; (c) To beep down costs of living —and costs of production; (f) To admit raw materials for j primary and secondary industries at as low a rate as.possible. 2. To use tho tariff for the purpose of maintaining and extending markets abroad for our products. . j 3. To encourage intra-Empirc trade. 4. To obtain revenue." -: ~