QUOTA DANGERS

Evening Star, Issue 21639, 7 February 1934, Page 9

QUOTA DANGERS

. EXPORT TRADE PERILS ADDRESS BY MR GOODFELLOW The danger that would face the dominion in eighteen months’ time when the Ottawa agreements expire, because of the possibility of Britain placing a quota on importations from New Zealand, was emphasised this afternoon by Mr W. Goodfellow, chairman of the Auckland branch of the New Zealand Producers’ and United Kingdom Manufacturers’ Reciprocal Trade Federation, in an address to members of the local branch of the federation. The growth of the federation was briefly traced by Mr Goodfellow, who said that there were now thirty-five branches established between Kaitaia and Invercargill, and the federation was publishing a monthly journal devoted to advancing reciprocal trade with Britain. The reason for the establishment of the federation was the absolute dependence of New Zealand on her trade with the United Kingdom. New Zealand was absolutely dependent on Britain for her markets, finance, and defence. Britain was New Zealand’s only market, and of her exports 88 per cent, went to the Old Country, while Australia sent only 50 per cent, of her exports there and Canada only 30 per cent., these two dominions having other markets open to their products. New Zealand looked to Britain for finance, because money was cheap there. That was due to the fact that New Zealand securities were classed as trustee securities in Britain. In the matter of defence, who other than Britain would or could defend New Zealand’s trade? It was Britain who protected New Zealand against the possibility of a foreign invasion, such as was possible from the East. The trade positions of the British dominions in relation to Britain for the first nine months of 1933 were set out by Mr Goodfellow in the follow-

South Africa 10,102,000 16,556,000 It might be said, continued Mr Goodfellow, that amounts represented in interest on loans and shipping profits should be taken into consideration, but these did not apply to the comparison, for all Empire countries were affected in much the same way. Part of the unsatisfactory trade position with Britain was due to the development by New Zealand of one-way traffic with Australia and Canada. Diversion of trade from Great Britain to other Empire countries would not help the Mother Country. “ New Zealand has failed to realise that the United Kingdom has changed her trade policy,” said the speaker. He recalled how in 1903 Mr Joseph Chamberlain had advocated protection and tariffs, how the M’Kenna duties were tried out in 1915, how in 1917 Lord Balfour’s committee had recommended the protection of agriculture, key industries, and industries of national importance, and how in 1923 the Imperial Economic Committee had recommended that these ideas be put into operation. Britain had discarded Freetrade in 1932 at the Imperial Economic Conference at Ottawa. She had agreed to put a tax on food, and had agreed to put a quota on meat for the benefit of Home and Empire producers. Britain had carried out her part of the contract forthwith, but as far as New Zealand was concerned she had not yet given serious attention to the subject. There were some who felt that New Zealand had done well in the matter of tariff reduction, and that there was nothing to worry about. Those people were wrong. New Zealand had not done well in the matter of trade as the quoted figures proved, and the British manufacturer could not get his goods into New Zealand. It had been suggested that when the Ottawa agreements expired in eighteen months’ time Britain would make uniform trade agreements with the dominions, but the speaker maintained that this view was a mistaken one. At Ottawa Britain offered similar conditions to the Empire countries, but made no commitment as to what would happen in the future. In his opinion what Britain really said was that she would give each dominion a start from .scratch, and at the end of three years would review the position. It seemed very unlikely that Jiritaiu would penalise New - Zealand if

she carried out the agreement and let Australia off because the Commonwealth had not done so. Proof of Britain’s intention to accord differential treatment was to be found in Ireland. Goods from Northern Ireland were admitted duty free, while those from the Free State had to pay a heavy tax. This view was also supported by ‘ Lloyd’s Bank Monthly ’ for October and many eminent men. . . . The change of trade policy in Britain, made it possible tlurt New Zealand would have to meet an import duty in Britain and for a quota at the end of the three years’ term, it being Mr Goodfellow’s opinion that an import duty was more likely. There was a 10 per-cent, tariff to-day, but that was waived for three years at Ottawa, but there was no reason why, at the end of the three years, Britain should not increase or decrease it, according to the measure of New Zealand reciprocity. “ New Zealand is at the crossroads to-day, and has to decide what she is going to do,” he added. “ She has either to develop closer trade relationships with Britain and reduce tariffs, thereby avoiding a quota, with a resuiting reduction in the cost or goods and an increase in the standard ol living in New Zealand, or she has to maintain tariffs and reduce her exports to the United Kingdom. The result of the latter course will be to maintain the high cost of goods, lower the standard of living and link up with Australia. We cannot stand alone. New Zealand has either to link up with Britain or Austradia. The wisest course would be to stick to Britain. The argument that a reduction in tariffs would increase unemployment was described by Mr Goodfellow as a bogey. He said that' tlie drop in the Customs revenue which would result could be made up by a sales tax of o per cent, on all commodities, including food. Such a tax would produce a greater revenue than the present duties and would not increase prices. Using a chart, Mr Goodfellow said that there were 550,000 workers m the dominion, who had 1,000,000 dependents. Of the workers, 25 per cent, were on farms, 15 per cent, m secondary industries, and 60 per cent, were in professional or all other occupations which did not produce anything for industry. Freetrade within Britain would benefit the 60 per cent, who were not producers, while the 25 per cent, on farms would also benefit by lower costs. Of the remaining 15 per cent, m secondary industries, approximately 5 per cent, would benefit from Freetrade, 6 per cent, would not be affected one way or the other, and the remaining 4 per cent, would be adversely affected. They would either have to become more efficient or would have to change their occupations. Freetrade between New Zealand and Britain meant that 96 per cent, of the workers would benefit, and only 4 per cent, would suffer. The capital represented in industry in New Zealand was £66,000,000, continued Mr Goodfellow. . The industries not affected by importations represented £49,000,000, and the actual capital invested in those that might suffer was £6,500,000. He asked if it was worth while sacrificing £49,000,000 to try to bolster up £6,500,000. If New Zea’aild did not have Freetrade and retained its tariff that £6,500,000 would grow, but it would grow at the expense of the other groups.

ing manner:— Britain Britain buys. sells. £ £ Australia 34,281,000 15,514,000 New Zealand 31,409,000 6,970,000 Canada 32,001,000 12,114,000 India 24,307,000 24,425,000