N.Z. EXPORTS

Grey River Argus, 17 August 1937, Page 6

N.Z. EXPORTS

MR. NASH’S NEGOTIATIONS INTERESTING REVIEW Mutton and Lamb (Per Press Association.!. AUCKLAND, August 14. Hon W. Nash, in a statement on the trade in mutton and lamb, said: — When I left for England, the mutton and lamb supplies from New Zealand for 1937 were still indefinite, and were subject to the prospect of a smaller allocation than that for 1936. In addition, the freedom fr.om a levy on the New Zealand mutton and lamb entering the United Kingdom was to expire in August, 1937. I may say. immediately, that the result of the negotiation during the early months of this vear have been to ensure that New Zealand is to be free from a levy on mutton and lamb for future years. In addition, the New Zealand mutton and lamb allocation for 1937 is to be the highest in our history—4,olo,ooo cwts. This is in accord with our objective of a regulated expansion of necessary food supplies to those who need them.

For future years the allocations will be the subject of negotiation between the New Zealand and the United Kingdom Governments—the objective' being maximum supplies to the consumers at prices consistent with reasonable remuneration to the producers. This result was achieved only after lengthy discussions, and the recognition of. the essential validity of the New Zealand point of view. PIG PRODUCTS. New Zealand’s position in the pork and bacon trade of the United Kingdom is quite satisfactory for 1937. New Zealand can send to the United Kingdom as many porker pigs as she has estimated will be available, 16,000 tons. For future years, the position is still under negotiation as far as baconers are concerned, and it is the bac'oner trade which is important in’the United Kingdom. .New Zealand has a ten per cent, increase for 1937 on her 1936 allocations. This gives a very satisfactory figure. For 1938 and 1939, similar increases may be expected, but I wish to emphasise that New Zealand must make every attempt to supply the type of product the English market needs in baconers. There have been some shortcomings in quality. More will have to be done in the way both of grading and of encouraging the export of the right type of baconer pigs. DAIRY PRODUCE. The United Kingdom have not yet decided what their policy is to be in regard to dairy produce. The prospect had been that there would be a levy put on Dominion butter and cheese imported into the United Kingdom in order to give more assistance to the home farmers. New Zealand’s policy, one which I have consistently advocated, is definite opposition to any form of levy. On the positive side, we have advocated regulated expansion until the needs of the United Kingdom consumers are met. No other policy can be advocated, when there are sources available to meet the needs of those who are at present going without. I have also pointed out thAt any levy on Empire dairy produce would be discriminatory as regards New Zealand, for dairy produce normally amounts to forty per cent, of our exports. No/Other Dominion has a percentage even one quarter of this. I feel that the United Kingdom recognises the justice of this statement. Recently, the United Kingdom announced that it was giving assistance to its home farmers in certain circumstances, but this was not to be by means of a levy on imports of Empire dairy produce. However. until the United Kingdom decides as to its dairy produce import policy, it will not be possible to decide New Zealand’s position. In the meantime the situation is satisfactory. A special point in connection with dairy produce, said Mr Nash, was that the tentative agreement with Germany provided that a considerable portion of the credits accruing to Germany from New Zealand purchase of German goods was to be utilised in the purchase of butter.

TRADE NEGOTIATIONS OVERSEAS. Following the difficulty expressed by the United Kingdom in determining its agricultural policy, and the possibility of not being able to conclude the negotiations prior to the necessity for my return to New Zealand, I discussed the matter with the United Kingdom Ministers as to the opening of negotiations with overseas countries, and then, with their goodwill, subsequently visited Germany, Russia, Denmark, the Netherlands and France. While .on the return voyage to New Zealand, trade discussions also took place with Canada, the United States and Panama. The results of these negotiations are set out in another column. GERMANY. On an approach by German officials, who emphasised the possibility of trade between the two countries being extended, Mr Nash had, towards the end of April, visited Berlin, and engaged in trade discussions with the German Foreign Office, which had led to a tentative agreement, which, after submission to Cabinet and Parliament would be published. The agreement covered both the procedure to determine the trade as between the two countries, and also a payments agreement, which provides that the whole of the credits available from New Zealand purchases from Germany shall be expended by Germany on the purchase of New Zealand products. The negotiations at Berlin were continued in ..London, and finalised the day prior to Mr Nash’s departure for Canada. As a result of the arrangements, it should be possible to find a market in Germany for considerable quantities of New Zealand butter and fruit. In considering the goods to be imported from Germ*any, care has been taken not to in any way prejudice New Zealand industries, nor to reduce the preferential margins to the detriment of the United Kingdom.

FRANCE. During a visit to Paris on 30th June said Mr Nash, he had exchanged views with French officials which should provide a basis for a trade agreement between France and the Dominion. France is already a very

good customer of New Zealand in respect of wool, and it seems probable that a market, can be found in that country for other products, particularly fruit. The position is to be further explored with a view to the possible conclusion of a trade arrangement, which will provide a mutual expansion of trade. DENMARK. The necessity to visit the Continent for the purpose of a trade discussion with Holland, to which commitment had been made, gave the opportunity to make a week-end visit to Copenhagen, where enquiries were made into conditions in the Danish dairy industry, and more especially into the exchange and import control procedure in operation in Denmark. He said: “Following arrival .at the Copenhagen air port on the afternoon of Sunday, 27th June, a visit was paid to a large dairy farm devoted to the supply of fresh milk to Copenhagen. We were accompanied on the visit by Mr Molteson, of the Danish Agricultural Council, from whom much valuable and interesting information was obtained respecting the conditions under which dairying in Denmark is conducted. A feature which attracted attention was the sight of some M cows, the best milkers, in stalls in a barn, where they are fed and milked four times a day. This was said to be the practice for the first month oi so of milking. All milking is done ay hand. Vigorous efforts are being made to eradicate T.B. from cattle in Denmark. A visit was also paid to .a large dairy factory, a small dairy factory, and a large bacon curing factory. The discussions with the Director and the Secretary of the National Bank in regard to the proce'duce in connection with exchange control were most helpful, and much useful data has been supplied in connection with the matter, which is the subject of a special report to the Government.

RUSSIA. The discussions which took place in Moscow with the Commissar of Foreign Trade and also with officials of that Department indicated that, while the possibilities of extending the sale or New Zealand products in that market were limited by the fact that Russia is herself an important producer of goods of the class generally exported by New Zealand, nevertheless, it seems probable that a market may be found 'for a number of New Zealand products, of which may be ruentioned wool, hides, sheep skins, rabbit skins, and stud sheep. An investigation into the possibilities of this trade is being made by the Russian Foreign Trade Department. During the visit certain aspects of internal trade weie also enquired into, including the planning of, industrial undertakings and price fixing. Information was also obtained respecting import and export procedure. IRISH FREE STATE. The question of negotiation of a trade agreement with the Irish Free State has been under consideration for some years. New Zealand enjoys quite a fair direct trade with the Irish Free State in hops, while a considerable quantity of apples is supplied ex the United Kingdom shipments. Imports into New Zealand from the Irish Free State are small, and the balance of trade is largely in the Dominion’s favour. Discussion on the question of trade between the two countries took place in London between Mr Nash and Mr Dulanty (High Commissioner in London for the Irish Free State). The latter country is anxious that certain products should be admitted on the same basis as similar products imported into New Zealand from the United Kingdom. A promise was given that the whole matter would be looked into after Mr Nash’s return to New Zealand. PANAMA. Three days spent in Panama awaiting the arrival of the “Mataroa,” were fully occupied in exploring the possibilities of increasing the sale of New Zealand goods, both in the Panama Republic and in the Canal zone. Discussions were held with Panamanian Ministers concerned with trade, and also with the principal traders interested in the purchase of New Zealand goods. Interviews were also had with the Governor of the Canal Zone, and the Commissary officials. contacts proved most valuable, and as a result of the information exchanged it seems probable that an outlet can be found for increased quantities of New Zealand products in those territories. The items which command most attention were butter, fruit and powdered milk, but there are other items of minor importance which also offer some possibilities of trade. It was particularly pleasing to note the high reputation enjoyed by New Zealand products. A further question which came under consideration, and which will be further explored, is the possibility of using Panama as a base for the shipment of New Zealand produce to Costa Rica, Honduras, Trinidad and otheb countries- with which trade is restricted, through lack of direct shipping facilities. SOUTHERN RHODESIA.

The possibility of developing trade between New Zealand and Southern Rhodesia was gone into very closely with the Controller of Customs for Southern Rhodesia, who was visiting London as a delegate to the Imperial Conference. New Zealand alreadv enjoys a small trade with Rhodesia in a number of items, the chief of which are glaxoi hops, seeds, and dairy appliances. There is little scope, however, for the development of any material volume oi trade with that country.

BRAZIL. Last year, 1936, the Government of Brazil, in conformity with their decision to denounce all commercial treaties and to replace them by new treaties, gave notice of intention to denounce the agreement with New Zealand, which had been concluded by an exchange of notes in 1932, guaranteeing mutual most-favoured-nation treatment. As a result of negotiations conducted from London, through His Majesty’s Ambassador at Rio De Janiero, Mr. Nash had arranged for a continuation of the existing position. New Zealand enjoys a fair trade with Brazil in apples, the free entry of which is thus assured. PALESTINE. While in London, Mr Nash discussed with Dr. Z. Brodetzky, representing the Jewish agency for Palestine, the question of reciprocal trade between New Zealand and Palestine, with particular reference to the possibility of establishing in Palestine a market for New Zealand butter. At the same time, consideration was given to the possibility of shipping citrus

fruits from Palestine to New Zealand. On the evidence available, it would seem that, in the meantime, there is little prospect of developing this trade. On the one hand it is difficult for the high quality New Zealand butter to compete with cheaper butter imported from other countries, principally Baltic countries; while, on the other hand, there is' difficulty in arranging for shipment of fruit from Palestine to New Zealand, owing, it is stated, not only to nigh freight rates, but also to the problem of securing spnee on outbound stecimers, through this having already been fully taken up by loadings at United Kingdom ports. UNITED STATES OF AMERICA. Mr Nash’s visit to the States 'was made with the primary object of discussing with the Government of that country the question of trade between New Zealand and the United States, although opportunity was also taken to make contact with traders in New York handling New Zealand products. The trade discussions were held at Washington, and occupied the major portion of three days, during which time Mr Nash had interviews with Mr Roosevelt (the President), and Mr Cordell Hull (Secretary of State), as well as with the head of the Commerce Department. The whole position of- trade between New Zealand and the United States was thoroughly explored, and it is hoped that, in due course, it may be possible to enter into negotiations which will result in the conclusion of' a trade agreement between the two countries that will expand trade both ways. There is, said Mr. Nash, a potential market in the United States for New Zealand primary products. CANADA. Following upon discussions which Mr Nash had at Ottawa .with the Hon. W. D. Euler, Canadian Minister of Trade and Commerce, while en route to England in November last, arrangements were made by him to return via Canada, in order that rurther discussions could take place on the subject of the trade agreement between New Zealand and Canada. Mr Mackenzie King (Prime Minister of Canada), and Mr C. Dunning (Canadian Minister of Finance and Customs) were passengers with Mr Nash on- the “Empress of Britain,” and this presented an opportunity for useful talks on the subject. The two lull days which Mr Nash stayed at Ottawa were fully taken up with discussions between Mr Nash, Mr Euler and officials. Mr Nash said that, although he was not at the moment in a position to give details, he considered the results of the negotiations satisfactory, and an announcement in connection therewith will be made at a later date.

NETHERLANDS. The question of negotiation of a trade agreement with The Netherlands. has been under consideration. The balance of trade has been in favour of that country, the figures of direct trade for 1936 being: Exports to The Netherlands £111,000; imports from The Netherlands £210,000. In addition, imports, mainly oil, from the Dutch East Indies amounted to £1,721,000. New Zealand’s exports to The Netherlands comprise largely wool and hides and skins, but a useful trade is also enjoyed in apples, Holland being not only a large consumer of apples, but also a distributing point for a number of Continental countries. Up to the present New Zealand apples, to a limited quantity, have been admitted into Holland on the most favourable terms, including remission of a portion of the monopoly tax. As' 5 a result of a visit to The Hague and negotiations with Dutch Ministers, the negotiations will, it is hoped, secure, in due course, a continuation and expansion of this treatment, as well as favourable treatment for other products. The negotiations have reached a stage where a conclusion of an agreement can be proceeded with, subject to the clarification of one or two minor points.

FRUIT. During negotiations with the various countries, the importance of providing for an extended market for New Zealand fruit was kept well in hand. When finalised, the agreement with Germany should open up a market for apples in that country. It is hoped to secure also the entry of increased quantities of fruit into The Netherlands. France also appears to offer a potential market. In addition, the investigations carried out at Panama indicated definite possibilities for the placing of larger quantities of New Zealand apples in that area. UNITED KINGDOM TRADE NEGOTIATIONS. Referring to the negotiations with the United Kingdom Mr Nash said that his departure from New Zealand was hastened .at the request of the United Kingdom Government, who. in September last, urged that he should leave New Zealand in time to permit his arrival in London not later than November. This interfered with the Governments arrangements as it was planned for Mr Nash to leave early in December, and to reach tne United Kingdom early in January. Following the rearrangement of duties, the Secretary of State for Dominion Affairs was advised by the Prime Minister that Mr Nash, on his arrival in London, would submit for consideration of the United Kingdom Government, the New Zealand Governments policy as follows:— (1) The United Kingdom, with minor qualifications, would be offered a full market in New Zealand for its manufactures and raw material equal in value to the balance, of credits from the sale of New Zealand products in the United Kingdom, after providing for (a) shipping charges, (b) invisible items, (c) debt services, (d) a proportionate sum for the reduction of New Zealand loans in the United Kingdom.

(2) If agreement could be reached, the United Kingdom in certain cases would be given the complete market in New Zealand ror special manufactures of a type .that were not produced in New Zealand. In special cases, New Zealand would give preference to United Kingdom manufacturers or producers desiring to instal and operate plants in New Zealand for the production of commodities at present imported. (3) New Zealand’s secondary industries to be extended, but not by reducing the total volume of United Kingdom export trade to New Zealand. ■* z The purpose of the offer was set out to be the extension of trade between the United Kingdom and New Zealand to the maximum. In return for the concessions to the United

Kingdom, the Government asked the right for the expansion of the market in the United Kingdom for its primary products, particularly butter arid cheese, meat, fruit, honeV, etc. The negotiations that had taken place in London, said Mr Nash, centred round the points detailed above as submitted by cable. The first discussions of urgency were those associated. with beef, mutton, and lamb. The main difficulty in connection with the negotiations, which are still continuing. Is lhe reluctance of the United Kingdom Government to admit expanding quantities of the Dominion’s primary products. The Minister said, however, that his answer to this, on behalf of the New Zealand, Government, was that it recognised the difficulties that come to the primary producers when a market was glutted, but it felt that it could not agree in general to the restriction or reduction of the production of any product that was necessary to human welfare. The difficulties of a falling price level were recognised, but it was obvious"that this was something that must be overcome if the people of the British Commonwealth were to have made available to them the things that were necessary for. normal health, which could be produced from their own resources. With this qualification, the Minister said that the New Zealand Government was at all times willing to co-operate with the United Kingdom Government in a way that would ensure that the farmer of the United Kingdom would receive like treatment to that which the New Zealand Government was determined would be available to its own farmers. One point in this connection that was of some importance was the necessity for the United Kingdom to ensure that production of the maximum quantity of foodstuffs from its own soil so as to ensure that, should difficulties arise that led to a between the nations, tne possibiliU of a shortage of food supplies in the United Kingdom would be reduced to , the minimum. Agreement was reached with regard to beer, mutton, and lamb, pork and bacon, the question of dairy products being deferred un'til the agricultural policy of the United Kingdom has been decided. The present position, said Mr Nash, is that the New Zealand Government is investigating the commodities that can be imported from the United Kingdom without ill-affecting New Zealand’s manufacturing economy, and that the United Kingdom’s policy with regard to New Zealand s imports will be determined when the United Kingdom’s agricultural policy has been finalised. Whilst the negotiations have not yet been completed said Mr Nash, he felt that hi. visit had extended uie understanding and goodwill between the Dommion and the United Kingdom, and this view was supported by the Secretary of State for Dominion Affairs, tie said that he thought, the d > had removed a good many of the d Acuities which existed before Mr Nash’s visit to the United_Kingdom and would help to remove any other difficulties in due course He added that the personal contacts could not have been happier, BEEF. New Zealand is to send 56 200 tons of beef of all types to the United

Kingdom in the year 1937. This is one result of the negotiations. This amount will be our peak—the highest we have ever sent to the United Kingdom in any one year. On Mr Nash's arrival in England, the prospect was the 1935 45,800 tons. The amount of 56/200 tons represents a 25 per cent, increase on what was in prospect. It will mean that for the first time for some years, New Zealand will not have to restrict her beef exports to the United Kingdom. Furthermore, for 1938 and 1939 there is every possibility tnat New Zealand’s allocation will be increased. This, of course, depends to some extent on economic circumstances in the United Kingdom. Wnen Mr Nash first assumed the marketing portfolio, New Zealand was almost committed to a situation where there would have been a levy on all New Zealand beef entering the United Kingdom for last year. - “Freedom from this levy was secured,’’ he said, “and I am happy to announce that we have secured freedom from a levy for the period of the beef agreement, which is for three years for certain.” At the time of the, Government’s assuming office, arrangements had been in train to set up an international meat conference to advise Governments on the general meat supply position, and to recommend the amounts of meat which should be allowed from the individual countries into the United Kingdom market. This arrangement cut right across the New Zealand Government’s trade policy, and eliminated 27 per cent, exports from any basis of bargaining. In particular, it gave mutton and lambs (our most important meat export) over to an international body to deal with. New Zealand prefers to negotiate directly, with the United Kingdom. Accordingly, the United Kingdom were advised that New Zealand could not agree to the idea of an internaitonal meat conference. Finally, New Zealand agreed to a conference which would deal with beef only. In addition, there is an Empire Council which is to be an investigator or advisory body. The beef conference does not represent merely the projected meat conference with a limited scope. There are new principles incorporated. One of the most important of these is that the aim shall be “maximum availability of supplies to consumers.” Also there is a definite allowance made for the expansion of Empire supplies to the United Kingdom market. In addition, New Zealand gets the right to swing over into chilled beef—that is, New Zealand may replace as much frozen beef as she likes with chilled beef. This should be of great, assistance to the beef industry. In connection with the beef conference, New Zealand’s position is safeguarded, nor are her rights to take beef into account in any general trade agreement jeopardised. He felt that the beef agreement is highly satisfactory to New Zealand. PACIFIC AIR SERVICE. “Every discussion we had was amicable and reasonable,” said the Hon. W. Nash, referring to his discussions with the United States Government and Pan-American Airways about the projected service America to New Zealand. “ Theie is every indication that the company| will continue arrangements for the

inauguration of the service. . All that remains is for the details to be considered by the Prime Minister, the Minister for Transport, and myself. 1 am hoping that the service will soon be commenced.” Mr. Nash added that there was a reciprocity clause providing that Empire aircraft should have facilities in American territory, similar to those New Zealand granted the Americans. New Zealand had a right to cancel the agreement. He did not think the service would be in operation by the end of the year. ANOTHER EMPIRE MARKETING BOARD. TBritish Official Wireless]. RUGBY, August 14. The new Colonial Empire Marketing Board will consist of about fifteen Members of Parliament and business men with experience in marketing. The Colonial Secretary will preside over the Board. The Commons has already voted £lO,OOO for expenditure of the Board, which, when in full operation, is likely to require about £52,000 annually. It is expected the Board will carry out a number of systematic investigations into Colonial marketing methous. It is estimated that the total value of produce exported from the colonies last year, for which figures are available, was ’in the neighbourhood of 240 million sterling.