NO EMPIRE TARIFF RELEASES

Gisborne Herald, Volume LXXIV, Issue 22464, 20 October 1947, Page 5

NO EMPIRE TARIFF RELEASES

REPORT OF DOMINIONS’ MOVE DENIED • (N.Z.F.A.—Reuter— Copyright.) (11.30 a.m.) LONDON, Oct. 19. There is no truth' in the Netv York Times’ report that Britain, South Africa and Canada will exchange notes releasing each other from Imperial preferences, says Reuter’s correspondent in Geneva, quoting an authoritative source.

It is understood, however, that some Commonwealth members, on completion of the Geneva negotiations, intend to exchange bilateral notes which will serve only as confirmation of the changes which the general tariff agreement makes in the present Empire preferences.

The South African Minister of Economic Development said in London last week that South Africa must trade with all countries and. notably, with the United States and could not confine her trade within any Empire fence. South Africa Last night concluded a trade agreement with the United States at Geneva, thus completing her series of Geneva agreements—the first country to do so.

Canada’s attitude is similar. The dollar shortage has placed her in an impossible position. An earlier report from New York said that barring a last-minute hitch, Britain, Canada and South Africa would sign an exchange of notes at the end of the Geneva trade conference, releasing each other from the obligation to maintain Imperial preference tariffs under the Ottawa accords of 1931, according to the New York Times correspondent at Geneva.

This wholly unanticipated sequel to the Geneva conference will, for practical purposes, mark the end of the socalled Ottawa system. The British, who have insisted they would not dismantle the Ottawa accords under United States pressure, will voluntarily go far beyond anything the United States negotiators have ever asked. Renunciation of Principle

In' the notes the three Governments will renounce the principle of Imperial preference and not merely approve the concessions that the three countries may have negotiated at Geneva affecting preferential rates. The notes will refer to the fact that they are being exchanged simultaneously with the signature of the general agreement on tariffs and trade. The successful conclusion of that agreement will be cited as the reason for the decision to alter their obligations to each other.

The notes will declare that any one of the three is free to negotiate a reduction in general tariff rates without deference to the existing preference margins. In a sense, this act will be more important than the general agreement itself. It should mark the end for all practical purposes of the basic divergence in British and American commercial policy that for 16 years has embittered economic relations even in periods of the closest political ties, Bv deliberately turning away from tariff discrimination, Britain, Canada, and South Africa, the three biggest customers of the United States in the British Commonwealth will pave the way for the successful operation of the International Trade Organisation. N.Z. to Remain Bound While India, Australia and New Zealand will remain bound by the Ottawa agreement as far as is known now. (bound to both Britain and the other Dominions), the freeing of Canada and South Africa from obligations to each other and to Britain will deal a blow to the system from which it is unlikely to recover. The correspondent adds: “The greatest secrecy is being maintained about the agreement. The initiative in the move was taken by the Dominions. “Britain agreed only after persistent pressure, including threats of unilateral action. The British Government wiii be able to say truthfully that it is not acting in response to United States pressure. While this will make its political problem in Britain a thousand times easier, it is still a bitter pill for the British to swallow. “Accordingly, it is expected that when publicity is finally given to the exchange of notes, it will be played down as a minor adjustment in, interCommonwealth relations.