MARKETS ABROAD

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

MARKETS ABROAD

QUOTA PROBLEM

RECIPROCAL - TREATIES

', "As I have already indicated, the use of the tariff for the purpose of maintaining and extending markets for our products is one of great importance' at the present time,''_ said Mr. Coatcs. "Great changes 'have taken place in international trade during the last few years. Before the depression tariffs were the chief. means by which countries regulated .their imports. Now, however, control- is exercised by means of quotas, embargoes, licensing systems, exchange " controls, and other devices, as well as by tariffs. This is due to the development of intense nationalism, which is a feature of tho policies of some, of tho principal nations of the world. Some countries, especially debtor countries, finding it almost impossible to get their goods over the high tariff walls. in other countries, felt forced;,.by-.way of reprisal and in an effort to reduce their consequent unfavourable trade balances, to" impose higher duties on imports, 'ov, where these were ineffective, to resort to the more, drastic methods already mentioned. The tendency towards self-

sufficiency is particularly cvident;;with respect to agriculture in certain European countries.

"According to information available on the subject, it seems ' that {the iriosl recent tendency istowards thenego- :- tiatiou of agreements' which aim" at balancing the trade betweeii countries. Illustrations of this wilK'be .fdundAin th c India-Japan textile V. -agreement. ■Prance has recently.! 'granted' : special quotas to countries granting corresponding facilities to French expprfe;>action i along similar lines appears twsave;bVe;a taken in Belgium, Ttaly ) --.'6erma§yJv -;and other countries. Some,, sy'stem^of; exchange control exists' in Germany, Czeehoslo.va.kia, and -other countries. The most important so far as New Zealand is concerned is the alteration which has taken place in the trade policy of the United Kingdom. ■ "It seems that to maintain and develop her overseas markets this,: Dominion must give serious consideration- to its -position. Whether or not- the - new policy is theoretically,; sound 4 :• is of minor importance. As :'i many ;b£' ;-tho great trading nations of Vthe.%prld have embarked on this system,- ther£ appears |to be no alternative but:that: New Zealand, to preserve and extend her'external trade, should mould her .policy accordingly. v .' ; .'V.

... "In my view New Zealand should make a strong effort to enter Into negotiations with other countries,- especially the highly industralised countries which offer possibilities for the disposal of. our primary products. To do'this we should be prepared, subject "to the Ottawa Agreement, to. reduce foreign tariffs, or to adopt quotas or other regulative devices in return for ■ concessions for our products. It is'admitted, of course, that-the carrying-out of; such a policy cannot be "achieved in-a short time. Negotiations, of this are necessarily difficult and 'involved, but in view of the outlook for, some of our primary products (particularly dairy products), it is essential that the mat! tep should be dealt with immediately.' It is therefore proposed to pursue the! policy indicated, above/^'As; honourable j members aro ; aware "an\aiTahgemenfcwas | made last year with the'GoVerninent if Belgium under which concessions.on cer-' tain of our primary produets'were made by that country in return'for' reductions in the New Zealand Tariff on certain of their goods. ■ -.'■- - "In this connection it must be remembered that under article 10 of the Ottawa Agreement,, New Zealand .has ■undertaken to preserve-.'the existing margin of preference on United Kingdom products where the margin-dqfes not exceed 20 per cent. adr valorem, (or its equivalent), and wherevfthe margin exceeds that figure not/to reduce it below 20 per cent, without'the consent "of liis Majesty-'s Government in the United Kingdom. ' ."> ~ ' .-! ■: ■-.".-■ p ''Where reductions have been proposed in the British preferential tariff the Government do not/ generally [speaking, intend, except for some special reason, to. reduce the general or foreign tariff below the rates at present levied, so that they, may be in a position.to pursue negotiations with foreign countries along the lines indicated above. '■'~■-■■-■

"Another -matter- that will require consideration' is the . mbst-f avourednationtrade arrangements with foreign countries to which New' Zealand is a party. Theso arrangements have recently, been subjected to a certain j amount of criticism, and it niayVtia the light of the- altered trading policies of other countries, be necessary to review, the position- ift 'so- far ;las' these "trade arrangements' are.= coneorned.-. : - ■;.. ■•■■•.'■ ~ /'l>i this connection reference fshould be made to-the importation of Japanese goods into New Zealand, and the steps that are being taken-in the kingdom and elsewhere to deal with this matter. The view'bf.the Ne^-Zea-laiuTGovernment is.that.the prqbie'ni'is .one which is most- suitable' for-Negotia-tion, between the two Governmeiits/'in important matferfor cbnsideratipnihere is.article. 12 of,'the Ottawa AgreWent under which any preferences granted to the products of the United Kingdom are automatically granted to the non-self-governing colonies, protectorates, and certain mandated territories;^' v- -