GIVE AND TAKE IN TRADE.

Evening Star, Issue 21518, 16 September 1933, Page 12

GIVE AND TAKE IN TRADE.

The situation which has developed in Anglo-New Zealand trade was discussed at a meeting in Dunedin yesterday. Obviously the intention of those in attendance was the undermining of New Zealand’s policy of protection through Customs duties. Rroadly speaking, New Zealand’s fiscal policy appears to bo a compromise, which, as is so often the ease, satisfies no one. Customs is an important item of revenue in the Budget, and the attempt is made to fix duties at a level which will bring in the maximum of receipts. To go beyond that level would be to defeat the revenue-producing intent, for then the prohibitory stage would be neared, and only indispensable commodities would be imported. To keep as near the critical point as possible pressure is constantly being brought to bear by local manufacturers. The thin end of the wedge was introduced long ago, chiefly on the plea that infant industries must be given a start in life until they reach the self-supporting age. But the period of adolescence becomes so protracted that one may be excused for wondering whether any local manufacturing industry is ever going to achieve maturity as evidenced by a competitive ability independent of tariff assistance. In some degree local industry has been, and still is, handicapped by the demagogues in politics who work on the theory that tho country’s standard of living can be maintained on a plane not governed by economic law.

For many years Britain watched her trade surplus decline in the hope that in time conditions would right themselves, and that once her export markets were recovered her unemployed would be absorbed and her industries, freed from the taxation incidental to maintaining an army of workless, would spring ahead with more vitality than ever. Those hopes were disappointed. Another course was tried, and, according to the latest trade returns, it is definitely producing results. Moderate protection is assisting home consumption of home-manufactured products and is inducing a partial reopening of some of the foreign doors. The principle is being applied to agriculture as well as to manufacturing, and it has caused infinite concern to our primary producing interests. It is curious bow blind they have been to the marshalling of the clouds until the skies are heavily overcast and tho downpour seems imminent. Suddenly it has been realised that a market which once seemed insatiable has its limits, and that the spoilt child is not to bo exempt from correction. There is still an indisposition to appreciate tho fundamental position as regards Britain. She finds it imperative to reduce outgoings for food in especial, and she knows she has tho means to grow more for herself. But many of our primary producers insist that vindictiveness or retaliation is tho mainspring of her action in respect of quotas. There can bo no doubt that Britain regards our protective tariff as excessive. There can bo even less doubt that she resents still more strongly our official raising of tho rate of exchange against her, almost before tho ink on tho Ottawa agreements was decently dry. If our primary producing interests are firmly convinced that these our artificial barriers to imports aro the reason for Britain’s attitude towards our exports they would bo at least consistent in advocating a restoration of a free or a natural rate of exchange. But that is tho last thing they will agree to. They have certain weighty arguments to back them. Tho Argentine and Australia are both competitors pi ours on British markets, and both those countries have depreciated currencies as compared with sterling. How can New Zealand compete with them if wo restore our currency to parity, or near it, with sterling? That is a question to which we sec no present answer. But from what Mr Paish, the British Trade Commissioner, said at yesterday’s meeting, trade and investment circles in Britain aro deeply resentful of our exchange policy, despite Mr Coates’s denial of the existence of any such feeling. Mr Paish advised this country to try and see things from the angle of the British farmer and the British manufacturer.. In this advice there is wrapped the imputation of our having hitherto been one-eyed. In respect of evidence before the Tariff Commission given by some New Zealand manufacturers, Mr Paish administered the pill without any sugarcoating. Ho, has certain British interests to safeguard here, and naturally things which tho average man passes without noticing more than casually leave on him a deeper and more lasting impression. But wo were not awaro that “ vilification ” of tho British manufacturer bad been indulged ip before the commission. Only slightly less excusable, however, is the practice of so many fanners, who depend on tho British market for their receipts, using foreign appliances and conveyances instead of British. In this matter Mr Waite gave them some excellent, if belated, advice.