The Hawera Star. THURSDAY, APRIL 26, 1928. TRADE TREATY WITH AUSTRALIA.

Hawera Star, Volume XLVII, 26 April 1928, Page 6

The Hawera Star.

THURSDAY, APRIL 26, 1928. TRADE TREATY WITH AUSTRALIA.

Delivered every evening by 6 o'clock in tlawera. Manair.. Normanby, ' Okamwa, Eltharn, Mangatoki. JCapontra, Alton, Hurleyville Patea. Waverley, Mokoia, Wkakainara. Ohangai, Meremere. Frasei Road, and Ararata.

Mr Pratten, Federal Minister for Customs, has announced! since his return to Australia that he found it impossible to complete a new trade treaty witli New Zealand owing to the position in regard to -tmtter. T-lie trade relations between the two countries 1 are discussed at length in Australian papers to hand by the latest mail, and the “Sydney Morning Herald ” devotes an interesting leading article to a critical examination of the attitude of the Federal Government. The reason butter has proved an obstacle to the negotiation of a complete treaty is revealed in the discussion of all the facts of the situation and it resolves itself into a question of free trade versus protection, with the free-traders blaming the Paterson levy scheme for the situation and condemning schemes which seek to protect primary industries. Mr Pratten, in his statement, gives much weight to the fact that New Zealand is improves trade balance with Australia while the latter country is not improving its own with the Dominion. According to the 1926-27 figures, the value of the exports from Australia to New Zealanddropped £760,000, while the value of New Zealand’s -exports- to the- Commonwealth. increased £470,000; a similar tendency was shown by the figures for the previous year. However, though Now Zealand is sending more of her exportable products into Australia, the situation is far. from alarming from an Australian point of view, for the balance of trade in favour of the Commonwealth, on the latest figures, is still £1,112,000. The “Sydney Morning Herald” secs nothing to cavil at in this tendency on. the part of New Zealand to improve her trade position with Australia. On other occasions, the “Herald” points out, the Minister for Customs has complained of the adverse balance against Australia in her trade with the United States, which last year amounted to £22,800,000. “If he sees an adverse balance with the United States as bad for Australia,” says the “Herald,” “he must see also -that an adverse balance against New Zealand must be bad for New Zealand, and he should not object if the adversity is being made less.” The real obstacle to the conclusion of a now treaty appears to be the attempt of the Federal Government to keep up the price of butter in Australia. The Paterson scheme enables the butter producer to charge a price above the export value, and to the producer the two values are equalised by the distribution to him of the proceeds of a levy on all butter produced. But an unforseen result of the Paterson scheme has been that the high local price 'has made possible the importation of New Zealand butter, and Australia is now in the strange position of being both an importer and an exporter of 'butter. To do away with this anomaly the Federal Government has decided, in effect, to prohibit the import of butter into Australia except in case of shortage. The 1 ‘ Herald’ ’ points out the real object .of this, prohibition is to enable the producer to obtain a price equal to the price he would obtain were -it possible to protect his industry by the ordinary means of a tariff, and asks very .pertinently what is going to -happen if all the primary industries force the Government to help them in this way. Obviously, if meat and bread and fruit sold at a price equal to the value which effective protection would give them, either wages would have to be increased, or everyone would be compelled to curtail his expenditure in other directions. In this free-traders see the working of a vicious circle—Australian primary producers being forced to seek protection and -higher prices in order to meet higher costs of production resulting from protection of the secondary industries.