TRADE PACT WITH GERMANY

Evening Star, Issue 22773, 7 October 1937, Page 9

TRADE PACT WITH GERMANY

RATIFICATION BILL PASSES OPPOSITION DISCOUNTS ADVANTAGES [Per United Press Association] WELLINGTON, October 6. The House met at 2.30 p.m. and proceeded with the second reading or the Trade Agreement (Now Zealand and Germany) Ratification Bill, in moving which the Minister of Finance, Mr Nash, explained that the Bill contained provision for anti-dumping duties, and also for reconciliation of trade between the two countries. Mr Hamilton asked where reference was contained in the Bill to Germany’s purchase of 25 per cent, of.butter. Mr Nash: It is in a letter from the German Government. _ It_ is not published because the publication of certain matter in it might cause some slight embarrassment to the German Government. _ . The Minister continued that in ms opinion the agreement could not do other than extend the! trade of both parties. It would not_ be disadvantageous to the United Kingdom, and it would also tend to promote better relations between the Dominion and Germany. He held that the closer nations got together by trade relations or otherwise, the further away would be the danger of war. Mr Hamilton pointed out that Mr Nash had not said the agreement would have no ill-effect on British manufacturers or British exporters. The agreement, he said, would not tend to extend trade; and international agreements of the exclusive type, such as the present one, very often led to complications. _ Often they had been the causes of disputes and war. Personally, he said, he and the members of the Opposition stood for Britain first, second, and_ third, and anything which would disturb our pleasant and valuable relations with Britain would have to be very carefully considered. Did the British Government welcome the agreemnt? he asked. '

As far as fruit was concerned, said Mr Hamilton, there was a lot of value in the agreement, but such was not the case concerning butter and wool. He went on to refer to the fact that the German Ministry of Propaganda was discouraging the consumption of butter in Germany, and was encouraging the' consumption only of commodities which' Germany herself could produce. There would be no chance whatever of increasing the consumption of butter in Germany, The Attorney-General (Mr Mason) said that the Leader of the Opposition had tried to state that because the agreement was beneficial to Germany and to New Zealand it must of necessity be detrimental to Britain. He did not think the world was made that way. They had held that if something benefited one side it must harm someone else. If such were the case it would kill international trade altogether. There was nothing in the Bill antagonistic to any other country, least of all to Britain. In fact, the proposed agreement was supported by Britain herself.

Referring to Mr Hamilton’s reference to low consumption of butter in Germany, Mr Mason said the German people might have been denied butter through sheer necessity, and he thought the members of the House had a sufficiently high estimation of the German people not to wish to see them deprived of the opportunity of securing it. Mr Kyle stated that Nazi Germany of to-day was out to break up democracy, and he expressed surprise to see a Labour Government making an agreement with that country. He was strongly opposed to the Bill, and would vote against it if he were given the opportunity of doing so. The Minister of Railways (Mr Sullivan) said it was very difficult to understand the attitude of the Opposition towards the agreement, when there was so much evidence of the desire of that party to sell butter to Germany in the past. There was no danger to the British or the New Zealand manufacturer in the agreement, and it seemed to him that it was very difficult indeed to find any objection to the Bill, Mr Coates stated that if the Bill had come down quietly, without the extravagant claims advanced for it by the Minister of Finance, ho was sure it would have gone through in a few minutes. For the past 10 or 15 years there had been a balance of trade with Germany in our favour, so where was the necessity for the agreement? There was nothing new in the agreement, which contained practically only what had been suggested by past Governments.

Mr Hargest said he was not opposing the Bill, but it was reasonable to assume that Germany was only concluding the agreement because it was to her advantage. It was not so much food that Germany wanted to-day as foreign credits. Germany appeared to have a predilection for breaking agreements, and although he could not remember her having broken a trade agreement, what safeguard was there against her breaking the present agreement after New Zealand had made considerable purchases from her? Mr Roberts said past Governments had tried to push our trade with the East. If it were right to do that, was it not equally right to push our trade in Europe? He considered the Minister had made a very valuable contribution towards the marketing of butter.

Mr Smith expressed disappointment that the Minister ot Finance had not come back with an agreement extending trade with Britain, and said we might find ourselves sorry some day for concluding the present agreement. He saw the possibility of future difficulties in the agreement with a country possessing such a record as the Government of Germany had. If a division were taken on the Bill he would vote against it. Mr Nash, replying, said there was nothing tremendously new in the Bill, but he was of opinion it would be advantageous to both New Zealand and Germany. There was not a word in the agreement which would restrict trade. It would merely remove some of the barriers already existing. The Bill was read a second time on the voices and passed through the remaining stages without discussion, the Minister of Finance stating., in reply to a question by Mr Hamilton, that the duties would not come into effect until a proclamation had been issued, probably this week.

FAVOURABLE EXCHANGE RATE Press Association—By Telegraph Copyright BERLIN, October 6. (Received October 7, at 10 a.m.) Official circles regard as more important than the German-New Zealand tariff concessions the provision of a fixed exchange rate more favourable to Germany. NO EFFECT ON AUSTRALIA Press Association —By Telegraph—Copyright SYDNEY, October 6. (Received October 7, at 8 a.m.) The Prime Minister (Mr J. A. Lyons) assured the Press that the New Zealand trade agreement with Germany would not greatly affect Australian industries. He pointed out that it was unlikely that Australia would negotiate a similar agreement. U.K. MANUFACTURERS WATCHFUL MEETING OF H.Z. REPRESENTATIVES [Per United Peesb Association.] WELLINGTON. October 6. “It is felt that the British Government will not view the treaty in quite the same light as those firms selling goods on the New Zealand market. For this reason it is to bo given a special scrutiny by our association, said Mr N. H. Russell, secretary of the United Kingdom Manufacturers and New Zealand Representatives’ Association, commenting to-day in an interview on the trade agreement between New Zealand and Germany. While he did not criticise the agreement, Mr Russell sounded a note or warning about one or two provisions, and said if necessary early representations would be made to tho Minister of Customs (Mr Nash) on any points which the association might consider required adjustment. The association was at present studying the treaty, and a meeting of the council had been called to consider the whole position, Mr Russell said. In the meantime, till the council had been able to analyse tho proposals it was not in a position to make a statement for or against the treaty, “We are very anxious to see that trade is not diverted from the United Kingdom, and we were glad to note the Minister’s assurance that the British Government bad not raised any abjections to the agreement,” Mr Russell said. “We notice that the Government has reserved the right to impose dumping _ duties where New Zealand industries are adversely affected. We want to make quite sure that the clause relating to similar protection for United Kingdom industries exporting to New Zealand adequately safeguards British interests. There is no doubt that some items mentioned at present come in largo quantities from the United Kingdom, but whether there will be a great diversion of trade to Germany we are unable to say till a closer study of the possibilities has been made. The provision made for payments is, we believe, a new one so far as New Zealand is concerned, and the operation of this portion of the treaty will be watched with interest. We are pleased to note that the Minister again states his realisation of the value to New Zealand of the English market, a policy which is in the forefront of the objects of this association.” Discussing the possible effects of the treaty, Mr Russell said it had to bo realised that a reduction of even 5 per cent, in the rate of duty meant a far greater reduction in the actual amount of the duty paid than appeared on the surface. Such an apparently small reduction taken in conjunction with such a thing as a subsidised industry could in effect cause a far greater diversion of trade than might at present be foreseen. “We also know from practical experience,” said Mr Russell, in conclusion, “ that the enforcement of the dumping clauses is most difficult in practice.’’

LtICAL OPINIONS IMTERFERENCE WITH BUSINESS SUGGESTED ' Local business men are not seriously concerned over the new German trade treaty, for no great volume of business with that country emanates from here. The general opinion is that it will tend to deflect a certain amount of trade from Britain and possibly other countries and that the only country to benefit ultimately will be Germany. “ Any movement that is detrimental to British trading,” commented one man, “ is not to be looked upon with approval.” If the new treaty provided an outlet for New Zealand products and a monetary return was guaranteed, was another opinion, it might have some definite point to it, but the agreement amounts to a system of barter by which New Zealand can only dispose of her products by accepting payment in German goods. . “ The Minister of Finance has said that there is an.unlimtied market for New Zealand products in Great Britain,” said another business man. “ but that market cannot b© fully exploited until the British working man’s standard has been raised. How that standard is to be raised when we withdraw a certain amount of our trade I cannot see.” Another opinion was to the effect that the Government was assuming the business man’s prerogatives. “ Trade between foreign countries should be allowed to develop on natural lines—that is, through private enterprise. This has been the case in the past, and there can be nothing gained by the Government pushing into private business matters as they are doing.” On similar lines was another opinion. “ Control of business by the Government is not to bo recommended,” it was stated, “ and this new treaty is nothing more nor less than a Government assumption of business control.” An interesting contrary opinion was given by a well-known importer, who said, “ Since the Great War there has been a considerable contraction in international trading duo to artificial ob-stacles-such as high Customs tariffs and trade barriers, quotas, or subsidies. Until we break down this policy of economic nationalism we cannot expect harmony and goodwill amongst the nations. Commercial policies should be adjusted so that prohibitive tariffs will be reduced and thus facilitate world progress. I think, therefore, that the reciprocal tariff now proposed by the Government is a correct move, for it will not only reduce for qur consumers the cost of some imported articles which are not manufactured in New Zealand, but will offer the very great advantage of increasing the outlet for some of our primary products.”