RECIPROCAL CONTRACTS

Evening Post, Volume CXXIII, Issue 42, 19 February 1937, Page 8

RECIPROCAL CONTRACTS

The produce freight contract to which reference was made by Mr. Nash in England is that which was officially announced in New Zealand last August. It Was negotiated by the Government (by virtue of ils position as owner of exported dairy produce) in conjunction with the Meat Producers' Board which inaugurated the system of long-term freight contracts and thereby effected considerable savings for meat exporters. The new contract has been in operation since September 1, and allows to the shipping companies an increase of 2h per cent, to compensate, it is understood, higher working costs on the New Zealand coast. The stipulation of sterling payment also involves an alteration, as on some freight lines the companies formerly stood part of the exchange. Nevertheless, the contract is reckoned a good bargain for New Zealand. As Mr. Nash pointed out it has reciprocal trade implications. If there is no two-way trade freights must, of course, be higher. But it should not be assumed, as some people may be inclined to assume, that a freight contract for three years, covering all refrigerated produce, is a precedent for the greater reciprocal trade agreements between Governments desired by Mr. Nash for the disposal of produce. The difference is a matter of practical politics. New Zealand meat producers and afterwards dairy producers, through their boards, were able to make contracts because they were dealing with a limited number of shipping companies in a comparatively simple matter. The Government has followed this practice. The sale and distribution of produce, involving widespread marketing, regulation of supply to demand and sales competition, is a much more complicated business, involving almost £40,000,000 a year instead of £4,000,000. If Mr. Nash can persuade the British Government to enter into such a contract, well and good, but the shipping agreement should not lead us to expect too much.