TRADE WITH RUSSIA

Evening Star, Issue 21037, 26 February 1932, Page 11

TRADE WITH RUSSIA

BRITAIN’S DISADVANTAGE HUGE EXCESS OF IMPORTS SOVIET’S INTOLERABLE POLICY. The character of the trade between Britain and Russia was examined last year by a committee of the Association of British Chambers of Commerce, and its report was published last month. Its principal conclusion is that Russia has been using the British market to an intolerable extent to dispose of exports, with the proceeds of which she buys machinery and other goods from Britain’s competitors. The committee conducted its inquiries entirely from the economic point of view, disregarding the political aims of the Russian Government. The report states that the difficulty of dealing with Russia is that on the one hand in the world generally there are manufacturers and merchants trading independently and in competition, while on the other hand there is the Soviet Government with absolute control of all exports and imports (including the selling and finance) through the medium of export and import syndicates (including co-operative societies controlled by the Soviet Government), which hold monopolies and form part of the “ People’s Trade Commissariat.” The imports into U.S.S.R. have, especially during the last few years, been principally such as are required to develop industries, transport, and agriculture, consisting mainly of machinery, the import of goods for consumption having been reduced to'a minimum. STATE THE ONLY TRADER. Under the Soviet system exports and imports do not appear as commercially separate operations, but as aspects of one operation. _ Both are handled by State organisations and form, in substance, part of the State finances in such a way that losses on one side can be covered by profits on the other side through the adoption of a certain system of crediting and budget grants. Similarly, the cost of production in the country and the prices of articles sold in Russia are difficult to establish, owing to State methods of payment to workers in kind or by forced or conscript labour, etc. It is essential, therefore, that the interests of British trade should be safeguarded either by legislation or by a definite trade agreement, or by both. This question should be considered purely from the economic standpoint and should not be connected with any considerations as to the conditions under which labour is employed in Russia. From the economic point of view British manufacturers are anxious to do business upon favourable terms with Russia or with any other country. British manufacturers point out, however, that they have to face very serious obstacles in competition with other _ countries. . . , Again, other countries, especially America and Germany, have a large number of their technical men stationed in Russia assisting Russians to erect and maintain machinery, and naturally their influence tends to get orders placed in their own countries. UNBALANCED TRADE. " Russia is enabled to finance these purchases in other countries mainly by reason of the large purchases we make from her,” is supported by the following statistics for periods of nine months to September 30, of British imports from Soviet Russia, and exports of British goods and re-exports of foreign and colonial goods

The committee remarks that the balance of trade against Great Britain (excluding re-exports of foreign and colonial goods) rose from £18,860,117 in 1928 to £22,744,010 in 1929, ana to £27,455,576 in 1930. During the first nine months of 1931 it amounted to £16,207,048. These figures do not take into account payments for services, such as shipping freights, insurance, etc.

FUTURE POSSIBILITIES. “ The great problem that the nations ' of the world will have to face is their attitude toward Russia in the future, ”j the report* continues. “ Russia Js a country of enormous potential wealth which is fast being materialised by the efforts of the Soviet Government, It is impossible to cut her out of the community of nations whatever her politics may be. The Five Years Plan may not be fulfilled up to 100 per cent, of the original scheme, but it appears to be making progress in production. There is no need to go into figures in order to grasp the position that with respect to such products as oil, coal, pig iron, steel, timber, chemicals, grain, sugar,furs, cotton, and dairy produce, Russia may in a very few years be one of the greatest producers in the world, if not the greatest producer, and be in a position to undersell any other country if she is allowed to carry on her present export policy. “ Great Britain certainly cannot any longer tolerate the present unequal trade balance, especially when it is only too evident that the money obtained by Russia for her imports into England is used almost entirely for the purpose of purchasing machinery and tools from England’s competitors. The position is intolerable. It was noted with interest at the time that Italy in April last signed a treaty with the Soviet Government by which the latter agreed to . purchase at least 350,000,000 lire of Italian products during the year.; France has, it is understood, made an arrangement on similar lines. “ We recommend that Great Britain should make some similar arrangement as in the case of Italy and France., Great Britain is Russia’s best market, and Russia would sacrifice a great deal to retain it. It is admittedly difficult for any two countries to arrange an exact balance of trade. To sum up—■ we require an arrangement with Russia to trade on a reciprocal basis, oup trade with Russia being regulated to an amount approximately equal to the amount Russia buys from us plus the value’ of our invisible exports to Russia.”- 1

1929 Imports ... £17,285,253 Exports £2,080,496 Re-exports £1,998,986 1930 ... 19,640,574 5,029,598 1,870,573 1931 ... ... 20,999,646 4,793,598 1,335,345