TRADE COLLAPSE RISK IF U.S. STOPS EXCESS GOODS EXPORTS

Gisborne Herald, Volume LXXV, Issue 22730, 31 August 1948, Page 4

TRADE COLLAPSE RISK IF U.S. STOPS EXCESS GOODS EXPORTS

(P.A.) WELLINGTON, Aug. 31. “Unless the United States continues to export goods which they give away there will be a collapse of world trade,” said the Minister of Finance, Mr. W. Nash, during question time after an address on the Havana Charter to the Wellington branch of the New Zealand Institute of Secretaries last night.

* "The United States is 12,000,000,000 dollars on the right side of her annual trade in excess of that she gave away—--8,000,000,000 dollars worth of goods last year,” he continued. "If she tried to import goods from other countries to that value, she would have internal chaos.

"They are an emotional people. Once they realise, as they did in 1929, that they are unlikely to be paid for excess goods, they may stop exporting them and they will be in the soup and so will the rest of the world. So will we, but I think we have got more to put in our soup than others.” Mr. Nash explained the provisions of the charter and their implications for the British Empire and New Zealand. Doubt About Achievements The purposes of the Havana conference were magnificent, he said, but whejier they would be achieved he did not xnow. Though tlie original policy of the United States at the Geneva conference on world trade had been toward the abolition of all trade preferences, including those within the Empire, a different position had been established. Preferences were retained and could be used as matters for barter in obtaining concessions with other Nations. By using them as barter concessions for exportation of New Zealand butter to the United States been obtained and also a more favourable position for the entry of Empire wools of finer sorts.

Import licensing such as New Zealand practised was an anathema to the United States’ whole theory of multilateral trade. They could be continue** under the charter in certain circumstances, but must be noil-discriminatory against any nation unless the country using them had a currency difficulty. Currency Difficulties “I think we and the United Kingdom will not be free of currency difficulties for a long time,” said Mr. Nash amid amusement. Though New Zealand was within the International Trade Organisation, she had not yet joined the International Monetary Fund (Bretton Woods). There was provision in the charter for this, providing that such a country must enter into an agreement with the International Trade Organisation not to enter into exchange practices which would nullify the provisions of the charter.” Mr. Nash expressed his personal opinion that it would be an advantage to New Zealand and the world if New Zealand did adhere to the Bretton Woods Agreement, New Zealand could not have reduced her exchange to parity with sterling in the one act. She could have appreciated it by 10 per cent to £ll2 10s and, at the same time, have made application to. the fund for a further 10 per cent to £lOl 10s to which the found would have had to reply within 72 hours. There was -owever, no general bar to appreciation of currencies. It was depreciations that were disliked and differential exchange rates for different countries being used as trade deterrents.