LEVY REJECTED

Evening Star, Issue 21974, 9 March 1935, Page 10

LEVY REJECTED

DOMINION’S REPLY TO MEAT PROPOSALS ESSENTIALLY A BEEF PROBLEM H.Z.'S WHOLE EXPORT TRADE IMPERILLED On February 13, 1935. the United Kingdom Government cabled its longterm meat policy for consideration by the dominions and Argentina Governments. A summary ol the proposals appeared in our cable news on Thursday. The following is a copy of the New Zealand Government’s reply “His Majesty’s. Government in New Zealand has given full consideration to your telegram of February 13. Since the Ottawa Agreement New Zealand has endeavoured to co-operate with the United Kingdom in an attempt to correct the situation caused by the abnormal glut which then existed in the market for meat. We believe that the arrangement made at Ottawa has so far worked satisfactorily. Despite difficulties in the initiation of the”plan, it will bo appreciated that New Zealand has not acted in any way which is inconsistent with the spirit of the agreement made in 1932. It is our opinion that no aspect of New Zealand’s policy in regard to meat has intensified the difficulties of the British producer or run counter to the expressed wishes of His Majesty’s Government in the United Kingdom “'Further, New Zealand has endeavoured on her part to carry out the Ottawa arrangements in respect of tariff reductions both by action immediately following the conference and by a subsequent general review of the tariff. The result has been u marked lowering of duties over a wide range of British imports into Now Zealand. Many duties on British imports havo been abolished. In consequence, the import of British manufactured goods has increased His Majesty’s Government in the United Kingdom will appreciate that even prior to Ottawa New Zealand’s tariff on British goods was approximately one-fourth as heavy as iwere the comparable tariffs of other dominions. “ We desire to re-emphasise that the economic development of New Zealand has been contingent upon the expansion of our . main export industries. • This expansion was necessary to provide the means of payment of interest on British capital invested in this dominion, and it enabled us to purchase increasing quantities of British exports. This was a mutually advantageous development. “ In the light of the foregoing and of the sympathetic consideration of his Majesty’s Government in the United Kingdom in past we find it difficult to believe that the proposals for a levy on all meat imported into the United Kingdom from New Zealand will provide a satisfactory solution. It would be discriminatory in its effects, and would involve New Zealand in serious economic loss, it would negative all the adjustments made in New Zealand designed to reduce.- farming costs. The position in regard to mutton and lamb has been satisfactorily adjusted as a result of the Ottawa Agreement. The difficulties facing the United Kingdom are not directly influenced by supplies of mutton and lamb. The problem in the United Kingdom, as stated in recent communications, is primarily related to beef, for which the demand of the British consumer has been falling off, and it would appear that New Zealand’s share of the beef imports is not such as would substantially affect the situation. ’ “ The imposition of the proposed levy would not only terminate the Ottawa Agreement, which New Zealand has made strenuous efforts to observe, but would also inflict severe and undue hardship on the sheep industry of this country. In fact, our mutton and lamb producers would be heavily penalised to assist in the solution of what is essentially a beef problem. INEQUITABLE AND DISCRIMINATORY. “ New Zealand regrets that it cannot voluntarily support the principle of a levy; and in the form proposed it is especially repugnant to meat producers and to the people of this dominion. New Zealand, with a population of 1,500,000, with the highest per capita external trade in the world, with meat exports amounting to a quarter of our total export values —a proportion which is enormously greater than'that of any other dominion —would be called upon to carry a levy which is demonstrably a far greater burden to new Zealand than to any other British dominion. We urge that the proposal is inequitable and discriminatory. “ In our the hope that the meat ■applying countries would agree amongst themselves to restrict supplies to suit the needs of the market for meat is slender, though if it is the wish of his Majesty’s Government in the United Kingdom New Zealand would, of course, be prepared to join in any discussions. We think that any agreement should embrace all suppliers if reasonable price stability is to bo. achieved. A TARIFF HINT. “ We consider that the proposal of the British Government would destroy the mutually beneficial results arising from the Ottawa agreement. In the case of New Zealand it would be contrary to the policy of giving the dominions more favourable treatment than that accorded to countries outside the Empire, since New Zealand is the least able among supplying countries to bear the disproportionate and onerous burden of a levy. In addition, we believe that the market would be heavily over-supplied, and this would involve a heavy fall in prices. Thus, New Zealand’s economic position would be rendered precarious. “ The long-term proposals of the United Kingdom Government in regard to meat, as expressed in your telegram of February 13, may react on our tariff policy. We fear that the proposal to impose a levy on all meats imported ’ into the United Kingdom would so damage our external trade as to bring into prominence the whole question of tariff revision in New Zealand. This we are most anxious to avoid. “ Finally, we would emphasise very definitely that any contemplated action which .nay be construed as undermmin" the principles underlying the Ottawa agreement should be avoidet , and before the Ottawa agreement, as it stands, is amended, a formal confeicnce should consider and approve o any alterations.”-

THE BRITISH SCHEME ' Tart VIJ, of the White Paper, announcing the British Government s decision, concludes:— It is the firm intention of His Majesty’s Government in the United Kingdom to safeguard the position of the United Kingdom Jive stock indusJElaviug regard to the terms of the Ottawa and Argentine Agreements, the only practicable means at present available to it for this purpose is a drastic reduction of the import of meat into the United Kingdom from all sources. If, however, the consent of the dominions concerned, of Southern llhodesia, and of Argentine can be obtained to necessary variation of their respective agreements, it would be possible to deal with the situation by the imposition of a lew upon the import of meat into the United iKngdom with or without a measure of supply regulation, . The policy which His Majesty s Government in the United Kingdom desires to bring into operation as soon as it is in a position to do so is to assist the United Kingdom live stock industry, according to the needs of the market, ftom the proceeds of a levy on imports (with a preference to the dominions), overseas producers being left free to regulate their own exports to this market themselves. The question therefore arises whether, with the consent of the Governments concerned, a levy should lie imposed upon imports forthwith as an alternative to drastic reduction of imports which would otherwise be necessary. If so, the following further questions arise:—(a) Whether all import regulations should cease as from the date on which the levy comes into operation, or whether there should bo a transitional period, after the imposition of the levy, during which a moderate degree of import regulations would be maintained. (b) Whether the levy should be imposed on all meat or only upon beef, veal, and live cattle, bearing in mind that in the latter case a liigher rate of levy may bo necessary than if levy were applied over the whole field of imported meat, and that it would also lx? necessary to ensure that imports of lamb, mutton, and pork are adequately controlled. EARLY STATEMENT FROM AUSTRALIA SYDNEY, March 8. Australia’s attitude,on the meat export question will bo set out fully and frankly in a statement in the House of Representatives next week by the Acting Prime Minister (Dr Earle Page) in a reply to the British White Paper. It is reported that the Commonwealth Government regards the meat negotiations as a test ease lor the whole of the Australian industries.