The Evening Star SATURDAY, JUNE 25, 1932. OUR TRADE WITH BRITAIN.

Evening Star, Issue 21138, 25 June 1932, Page 12

The Evening Star SATURDAY, JUNE 25, 1932. OUR TRADE WITH BRITAIN.

Yesterday Mr Forbes, who is not going to Ottawa, issued a lengthy statement on tho purpose and programme of the conference; and Mr Coates, who is going, made a speech at the Reform Club’s farewell to him. Unquestionably the most arresting piece of information was contained in the final paragraph of Mr Coates’s speech. Tho immediate problem, he says, is serious for New Zealand. Our Government is not certain how much longer Britain can absorb our surplus products. From what Mr Coates added we assume that one of Now Zealand's main tasks at Ottawa will be to arrange with sister dominions to admit the balance of our surplus exports which Britain will not require. This is very plain speech, and, if it fairly reflects the position, Mr Coates is quite justified in saying that the immediate outlook for tho dominion's products is not satisfactory. It has not been so for some time, because prices have been too low to pay the producer; but now, at tho very conference which tho producer hopes will successfully deal with tho currency problem, which is understood to account for low prices, it appears that there will be sprung on tho producer the possibility of bis main market shrinking in size and the need for him to find others. The direction in which ho is to look for them is one that lie lias tried before, sometimes obtaining a footing therein, and then

being squeezed out by the internal resistance of tho rival local xmoducer in whatever country has been tried. Frankly, in some lines of trade as between different units of tho Empire the obstacles raised have been such as to emphasise the old saying of there being no sentiment in business. It is, of course, one of tho main purposes of Ottawa to break down all that, and if ever it is to be done it surely will bo done there. The whole complaint about world depression may bo crystallised in tho realisation that world trade is nearly at a standstill because the trade channels have become fouled and blocked. The impossibility of trying to carry on any longer without cleaning them out is so evident that the will to begin doing it, no one country standing aside from the task, may inspire and enthuse tho whole Ottawa Conference.

Tentative guesses as to why Britain may cease to be so receptive a market for New Zealand’s products are surely permissible. Recently our trade with Britain has been very lopsided. Vessels have been coming out here practically in ballast, for, being hard up, we have been poor purchasers. We have been too occupied in paying for invisible imports to be able to afford visible ones, and ocean-going vessels are not needed for the settlement of our interest on oversea debt. The loss Britain is able to sell to us the less she is able to buy from us. The same holds in tho trade relations as' between Britain and all other countries, whether they fly her flag or not. And as Britain has to live it is necessary for her to become far more self-supporting. Symptoms of her fresh effort in that direction may be seen in the introduction of the wheat quota system for the encouragement of home-grown wheat and in many other directions. The encouragement of British agriculture on sound lines would at once help in solving the problem of an adverse trade balance and the equally serious one of a half-empty countryside and towns swarming with unemployed living on the dole. In 1 the crisis of last September there was general insistence on the need for rectifying Britain’s trade balance as well as for balancing her Budget. The latter was, by huge selfsacrificing effort, speedily accomplished; the other matter is a question of far longer time, and every now and again one piece of evidence or another outcrops to show that individuals and organisations are steadily working on it. The passage in Mr Coates’s speech yesterday is the latest piece of evidence, and New Zealand would be foolish to ignore or belittle it. Such a statement is not usually made without inside information and a full sense of responsibility. It is known that Cabinet has been working hard in preparation for Ottawa, and this preparatory work must involve constant communication with the other countries sending delegations, notably Britain. Outside confirmation of such possible developments as Mr Coates has hinted at is not wanting. One of the articles comprised in ‘ Tho Times Empire Products Supplement,’ issued with special hearing on the Ottawa Conference, deals with Britain’s meat supplies, considered as an Imperial problem. In tone it is not in the least unsympathetic with dominion flock and herd owners, but the writer’s main consideration is plainly the present depression in British agriculture and how to lift it. The most obvious way, he says, would be to raise prices of beef, mutton, and lamb by restricting importations, either by high tariffs or by the quota system in conjunction with a high tariff; but he doubts whether the British consumer would submit to the cost of living being thus raised. Regarding the quota system :—“ The population and the amount of meat consumed per capita in the country are known, while the amount of meat which the country’s agriculturists can produce can be ascertained or estimated. Tho balance necessary to feed the population would be imported, either duty free or subject to a tax, under a licensed quota. This method has been in operation on the Continent. Such a system enables the Government to inform agriculturists that if they produce more food animals the import quota will be reduced, and that the possibility of excluding all imported meats depends on their production. It also encourages farmers to breed more animals, as they know there will be an assured market at an almost stabilised price for their stock, and prices will not be reduced to such a level as to make production unprofitable by ‘ gluts ’ of imported meat. Further, it ensures that money spent on meat either remains in the country or goes to the dominions or to the countries which buy most from the country to which the quota applies.”

It may be pointed out that this writer classes dominion producers next to British stock raisers in the application of the quota, but seems to stipulate that the dominions must accept manufactured goods in payment for their shipments. The countries which buy most from Britain will find easiest admission to her markets. There has been some deprecation of the introduction of the bargaining spirit into Ottawa. To banish it is an impossibility. In New Zealand’s case its suppression might be damaging to ourselves. If the tendency of our markets is to contract when it is vital to us that they should expand no false sense of modesty, no inclination to forfeit a place that has been gained by effort, experiment, or the incurring of a considerable public and private debt per capita should be allowed to handicap the presentation of our case at Ottawa. Judging by the personnel of New Zealand’s delegation, Ministerial and otherwise, such a mistake is very improbable.