BALANCE WANTED

Evening Post, Volume CXXIII, Issue 47, 25 February 1937, Page 12

BALANCE WANTED

ONE-SIDED TRADE

CANADA AND AUSTRALIA

"Evening Post,'! February 25,

Australia and New Zealand in common have rather lop-sided trade rela-. tions with Canada, and with the "lop" against them. So far as this Dominion is concerned the position at the close of 1936 was as follows: — ■ . . £(N.Z.). Imports from Canada 3,325,692 Exports to Canada .-..- 1,098,037 Balance against N.Z." .. £2,227,655 . Canadian imports from New Zealand will consist largely of wool and other . raw products, while from Australia they would include dried fruits and wines as well as wool, skins, and hides. The present trade position between Canada and Australia has been giving the Commonwealth Government some uneasiness of late, With the result that, the operation of the trade treaty -with ■ Australia now in force has meant a drift in favour of Canada over a number of years. Whilst the, "balance of trade" theory is generally accepted by the countries,, the principle of equalising as far as possible the exports to a'particular country and the imports drawn from it must, it is held, also be followed by Australia. . Canada's favourable trade , balance with Australia since 1930 amounts to . £11:600,000. Australia in 1936 pur- ■ chased from Canada goods to the value of £5.375,000. whilst Canada's imports ' from Australia amounted to £1,322,000. Australia asked for all-round _ additional concessions with the object of increasing its exports by £1.000,000. Mr. Bennett, the former Prime Minister of Canada, during' his recent visit to Australia, pointed out that the discrepancy between the trade figures of the two,countries is mainly due to the fact that Canada sells to :the Commqn- ,' wealth large number's 'of motor-cars ■ and much' lumber. Canada ; buys sub- '■ stantiaT- quantities ..of wool, and, Aus- : tralia.rhas!;almost>a; monopoly of the . Canadian market in dried fruits. CANADIAN DELEGATION. ■ Delegates from Canada are .now in 1 Australia discussing with the Government the present trade position. The Minister in charge of Trade Treaties ' (Sir .Henry Gullett) submitted to the Cabinet requests.. made by the delegates. "-Little progress was made with the -discussion. It is understood that the principal request;■-. related to the- : extent ta which Canada.should be subject to 'the Commonwealth's'- .trade . diversion'policy, by. ..which' a quota has been placed on. motor-car importsfrom ' Canada:'*:.-It .is .understood also that the1 Canadian - delegation- sought a modification of the:, operation against . 'certain', industries domiciled in Canada of-the provisions: of, the Customs Act, which required that manufactured articles should contain a certain quota of "British-made" material before they can. be imported to Australia at British preferential -rates of duty. It has been stated that many articles imported from Canada contain a proportion of material ' made in the United States, and that ■ the Canadian Government fears that certain of its industries may be adversely affected if the quota of British material required wer/s increased. DIFFICULT NEGOTIATIONS. Negotiations for a new trade agreement between Australia and Canada have proved so much more . difficult than was anticipated when the Canadian delegation reached Australia, that the Canadian 'Minister, for .Commerce' : (Mr. Euler)-has cancelled ■ his arrangements for his' return to .Canada on February 18. .The date of his return is now uncertain. Discussions between Mr. Euler and the Minister for Trade Treaties (Sir Henry Gullett) . were continuing when . the mail left . Sydney. . It is understood that the chief obstacle to the completion of a new agreement continues to be the difficulty of adjusting. Australia's heavily adverse trade .balance with Canada. Australia was reported to have proposed to Canada that this adjustment should be made in part by modifications in trading relations, which will probably have the effect of curtailing Canada's access'to markets in Australia. In this way Australia would be able to barter the portion of the-Aus-tralian market thus vacated by Canada in making favourable agreements with countries able to purchase more Australian products than Canada is able! to take. ; Incidentally it is understood that the Commonwealth Government urged the export of oranges to Canada.', It be.lieves that if this. market is conceded the practical, difficulties "of transport will be no greater than those to New Zealand, and that the development ;of. a market in Canada will permit of a rapid and valuable expansion of citrus exports. CASE FOR CANADA. Mr. Euler is" reported 'to have reminded the Australian Minister for Trade that Canada has attained greater industrial development than Australia and consequently has a greater range of goods to sell to Australia than- Australia can sell to her. Aus- 'n tralia already has practically the whole i Canadian market for her dried fruits. { Canada herself is a substantial pro- i ducer of canned fruits, especially i peaches, from the Niagara Peninsula. l More than half Australia's purchases 4 from Canada comprise motor chassis ' and machinery essential to the development of Australia which cannot be - bought more advantageously else- w where.: To some degree faulty salesmanship prevents full expansion of Australian trade with Canada. C TJie Corhmonwealth Government J considers, however, that the great ex- Icess of Australian purchases from > Canada over sales to her places it in rI a very strong bargaining position. \ It has been made clear indirectly by Sir Henry Gullett in speeches : in 'J Parliament that the licensing system. ~J already applied with United States poods with prohibitive effect in many D lines, will have to be extended to B other "bad-customer" countries if, other T. means of.'securing an equitable adjust- "[< ment of trade fail. ■ f