RECIPROCAL TARIFF CHANGES.

Evening Star, Volume IX, Issue 2686, 26 September 1871, Page 2

RECIPROCAL TARIFF CHANGES.

An important despatch on this subject, from the Secretary for State for the Colonies to Sir George Bowen, was laid before Parliament last week. It is dated July 13, and in it Earl Kimberly states that lie has had under consideration for some time despatches from the Governors of several of the Australasian Colonies, intimating the desire of the Colonial Governments that any two or more of those Colonies should be permitted to conclude agreements securing to each other reciprocal tariff advantages, and reserved Bills to this effect have already reached him from New Zealand and Tasmania. His Lordship then proceeds to say : If her Majesty’s Government were satisfied that they could properly consent to the removal of the restriction against differential duties, it would not be possible now to obtain for so important a measure the attention which it should receive from Parliament. It is by no means improbable that the introduction of a bill to enable the Australasian Colonies to impose differential duties might raise serious discussions and opposition both in Parliament and in the country, on the ground that such a measure would be inconsistent with principles of free trade and prejudicial to the commercial and political relations between the different parts of the empire ; and 1 feel coulident that the Colonial Governments will not regret to have an opportunity afforded them of further friendly discussion of the whole subject after learning the views of her Majesty’s Government upon it before auv final conclusion is arrived at. 1 will, therefore, proceed to notice those points -which seem to her Majesty’s Government to require particular examination. The Government of New Zealand appears from the bill laid before the House of Representatives, and from the financial statement of the Treasurer, to have originally contemplated the granting of special bonuses to goods imported into New Zealand from the other Australasian Colonies. As, however, this expedient was not eventually adopted, I am relieved from the necessity of discussing the obj :ctions to such a mode of avoiding the rule against differential duties. The proposals now before me raises the following questions, namely ; 1. Whether a precedent exists in the q ise of the British North American Colonies for the relaxation of the rule or law now in force. 2. Whether her Majesty’s treaty obligations with any foreign power interfere with shell relaxation 3. Whether a general power should b# given to the Australasian Governments to make reciprocal tariff arrangements, imposing differential duties, without the consent of the Imperial Government in each particular case. 4. Whether on grounds of general Imperial policy the proposal can properly be adopted, The Attorney-General of New Zealand, in his report accompanying the reserved bil 1 , observes that its main i revisions areahmst a literal copy of provisions which have been fer some time past in force in Canada and other North American colonies, and I observe that in the various communications before me the argument is repeatedly vressed that the Australasian colonies are entitled to the same treatment in this respect as the North American c do.- ies. It may be as wel l , therefore, to explain what these provisiots actually are. I enclose extracts from the Acts of New* foundlatid and Prince Edwards Island of the year 1856 ; but I need not dwell upt n them, because, as dealing with a limited list of raw materials and produce not imported to those colonies from Europe, they are hardly, if at all, applicable to the present case, and I shall refer only to the Act passed by the Dominion of Canada, in 1867 31 Vic. cap. 7), which is the enictmeut principally relied upon as a precedent. Schedule D of this Act exempt from duty certain specified raw materials and producp of the British North American provinces, and the third section enacts that “any other articles than those mentioned in Schedule D, being of the growth and produce of the British North American provinces, may bo specially exempted from Customs duty by order of the Governor in Council.” This, which was one of the first acta of the Legislature of the newly constituted Dominion in its opening session, was passed in the expectation that at no distant date the other possessions of Her Majesty in North America would become part of the Dominion, and the assent of Her Majesty’s Government to a measure passed in circumstances so peculiar and exceptional cannot form a precedent of universaland necessary application, although I am not prepared to deny that the Australasian Governments are justified in citing it as an example of the admission of the principle of differential duties. With reference to the second question, as to the existence of any treaty the obligations of which might bo inconsistent with compliance by her Majesty with the present proposal, the Board of Trade have informed me that this point could only be raised in connectiou with the terms of the treaty between this country and the Zollvereiu of 1805, extended through the operation of the “most favored nation ” article to all other countries possessing rights conferred by that stipula* tion. The 7th article of that treaty, which extends the previsions of previous articles to the colonies and foreign possessions of her Majesty, contains the following provision “ In the colonies and possessions, the pro. duce of the states of the Zollvereiu shall not be subject to any highef or othef import duties than the produce of the United Kingdom of Great Britain and Ireland, or of any other country of the like kind. 1 ’ I am advised that this 7th article may be held not to preclude Her Majesty from “ permitting the Legislature of a British posses: sion to impose on articles being the produce of the states of the Zoilvcreign any higher or other impott duties than those which are levied on articles of the like kind, which arp the produce of another British possession, provided such duties are not higher or other than the duties imposed on articles of the like kind, being the produce of the United Kingdom of Great Britpin and Ireland.” But apart froui the strict interpretation of the treaty, it seems very doubtful whether jt would be a wise course on the part qf the Australasian Colonies, which, both as regards emigration and tradp, have more extensive relations with Germany than vyith perhaps any other country, to place German products and manufactures under disadvantages in the colonial markets. Proceeding to the third question, whether

if the principle of allowing the imposition of differential duties were conceded, the colonies could be permitted to impose such duties without the express sanction of the Imperial Government in each particular cisc. you will be prepared, by what I have already said, to learn that I consider it open to serious doubt whether such absolute freedom of action could be safely given. Her Majesty’s Government are alone responsible for the due observance of treaty arrangements between foreign countries and the whole empire, and it would be scarcely poss ble for the Colonial Governments to foresee the extent to which the trade of other parts of the empire might be effected by special tariff agreements between particular c.lonies, . . It must, moreover be anticipated by Hiese differential agreements being avowedly for the suppos d benefit of certain classes o the community, would be liable to be affec ed by temporary p 'litic.il circumstances. The door having been ouee opened, each producing or manufacturing interest, and even individuals desirous of promoting auy new e terprise, mi"ht in turn press for exceptionally favorable treatm nt under the form of intercolonial reciprocity, while the rea 1 grounds for such changes as might be proposed, would be intelligible only to those concerned with local politics. It would appear, therefore, to be by no means clear that her Majesty’s Government could be relieved from the obligation of examining the particulars of each contemplated agreement, however limited ; and while it would be very difficult for _ them to make such an examination in a satisfactory manner, a detailed inquiry of this kind could hardly fail to be irksome to the Colonies, and to lead to misunderstandings. It remains for me, lastly, to ask how far it is expedient, in the interests of each Colony concerned, and of the empire collectively, that the Imperial Parliament should be invited to legislate in a direction contrary to the established commercial policy of this country. Her Majesty’s Government arc bound to say that the measure proposed by the Colonial Governments seems to them inconsistent with those principles of free trade which they believe to be alone peimauentiy conducive to commercial prosperity ; nor, as far as they are aware, has any attempt been made to show that any great practical benefit is expected to be derived from reciprocal tariff arrangements between the Australasian Colonies- , , At all events, I do not find anywhere among the papers which have reached, those Strong representations and illust ations of the utility or necessity of the measure which I think might fairly be expected to 1 e adduced as weighing against its undeniable inconveniences. It is, indeed, stated in an address before me that the prohibition of differential customs treatment “ operates to the serious prejudice of the various ptoducing interests of the Australian Colonies.” I understand this and similar expressions to mean that it is desired to give a special stimula or premium to the colonial producers and manufacturers, and to afford them the same advantage in a neighboring colony over the producers and manufacturers of .all other parts of the empire, and of foreign countries, ue they would have within their own colony under a system of protective duties. What is termed reciprocity is thus in reality protection. It is of course unnecessary for me to observe that, whilst her Majesty’s Government feel bound to take every proper opportunity of urging upon the Colonics, as well as upon foreign Governments, the great advantages which they believe to acci ue to every country which adopts a policy of free trade, they have relinquished all interference with the imposition by a Colonial legislature of equal duties upon goods fr.m all places, although those duties may really have the effect of protection to the native producer. But a proposition that in one part of the empire commercial privileges should be granted to the inhabitants of cci tain other parts pf the empire, to the exclusion and prejudice of the rest of Her Majesty’s subjects, is an altogether different question ; and I would earnestly request your Government to qonsider what effect it may have upon the relations between the Colonies and this pountry. Her Majesty’s subjects throughout the cpipire, and nowhere more than in Australasia, havp manifested on various occasions of Jafe their strong desire that the pounectipn between the cqlouies and this country should be maintained and strength pued ; but it cau barffly be doubted that the imposition of differential duties upon British produce and manufactures muse have a tendency to weaken that connection and to impair the friendly feeling on both sid> s which I am confident your Government as much as Her Majesty’s Government desire to preserve. I have thought it right to state frankly and unreservedly the views of Her Majesty’s Government on this subject, in order that the Colonial Governments may be thoroughly aware of the nature and gravity of the points which have to be decided; but I do not wish to be understood to indicate that Her Majesty’s Government have, in the present state of their information, come to auy absolute conclusion on the questions which 1 have discussed. The objections which 1 have pointed oi t to giving to the colonies a general power of making reciprocal arrangements would not apply to a Customs union with a uniform tariff; and although such a general union of all the colonies is, it appears, impracticable, it may be worth while to consider whether the difficulty might not be met by a Customs union between two or more colonies.