TRADE REVIVAL

Evening Star, Issue 22718, 4 August 1937, Page 11

TRADE REVIVAL

DIFFICULTIES TO OVERCOME Two important difficulties have to be overcome before world trade can expand to anything like pre-depression levels. The Bank of New South Wales, in its latest circular, ‘ World Trade/ considers that progress has been, and is being, made towards solving the first problem, that of monetary reconstruction. But the second difficulty, the revision of tariff barriers, has yet to be faced. Systems of quotas and licenses were resorted to as temporary measures in 1931 and 1932 as drastic expedients to stop the collapse of prices, but after five years most of tliem remain. It is lioped, however, that the efforts which have recently been made by groups of European countries, and the present discussions between England and the United States may “ break up the jam that blocks the flow of world trade.”

Ever since 1931 countries been trying to restore the mysterious relationship which is supposed to exist between agricultural and industrial prices. The consequence has been a united political front in favour of protectionism, with the result that no section of the community is vitally interested in having the temporary obstacles to trade removed. However, it is doubtful, the bank suggests, whether the policy of “restoring the balance between agricultural and secondary prices ” is beneficial to primary producers. It is pointed out that “ there is really no such thing as a price level for agricultural products, but only a variety of prices for a variety of farm products.” “Indeed,” the bank states, “the future developments of agriculture firobably depend upon a change in restive prices of agricultural products.” It suggests that if the United Kingdom, for example, were to concentrate on producing “ protective ” foods such as butter, milk, and fresh vegetables, all of which can be produced by small scale farming, there would be no need for her to restrict imports of “ energy ” commodities such as wheat, sugar, and beef, which are produced on a large scale overseas. Standards of living all over the world need to he raised, and the bank sees in “ the marriage of health and agriculture,” proposed by Mr S. M. Bruce, High Commissioner of Australia, at a meeting of the Economic Committee of the League of Nations in 1935 a means of assisting primary producers. “It is to the interest of primary producers everywhere that the policy of nutrition should be pressed forward at the international level so that the present tendency towards restriction can disappear.”-