LEVY OPPOSED

Hawera Star, Volume LIV, 9 March 1935, Page 5

LEVY OPPOSED

MEAT EXPORT EMBARGO New Zealand Government Stands by Ottawa Agreement REPLY TO WHITE PAPER SERIOUS LOSS INVOLVED (Government Memo.) WELLINGTON, March S. In a considered reply to the British Government’s White Paper the New Zealand Government objects to the proposed levy on all the Dominion’s meat exports to the United Kingdom. It is urged that the proposal is inequitable and discriminatory. * , Objection is “based on these - grounds: A levy would involve this country in serious economic loss; it would negative all adjustments to reduce farming costs; the imposition not only would terminate the Ottawa Agreement, hut would inflict severe and undue hardship on the Dominion’s sheep industry. Moreover, the New Zealand Government holds that Britain’s proposal would destroy the mutually beneficial results arising from the Ottawa Agreement. It believes it would involve a heavy fall in prices and this would render New Zealand’s economic position precarious. The reply emphasises New Zealand’s tariff efforts to promote British trade, and notes expansion in Britain’s favour. It is feared that the imposition of a levy on meat exports would so damage the Dominion’s external trade as to bring into prominence the whole question of tariff revision. Finally New Zealand suggests that before the Ottawa Agreement is amended a formal conference should consider and approve of any alterations.

The full text of the New Zealand Government’s reply’ is as follow :• “Since the Ottawa Agreement New Zealand has endeavoured to co-operate with the United Kingdom ,in an attempt to correct the situation caused by the abnormal glut which then existed in the market for meat,” says the reply. “We believe that the arrangement made at Ottawa has so fai worked satisfactorily. Despite difficulties in the initiation of the plan, it will be appreciated that New Zealand has not acted in any way which is inconsistent with the spirit of the agreement made in 1932. It is our opinion that no aspect of New Zealand’s policy in regard to meat has intensified the difficulties of the British producer or run counter to the expressed wishes of His Majesty’s Government in the United Kingdom. TARIFF REDUCTIONS “Further, New Zealand has endeavoured on her part to carry out the Ottawa arrangements in respect of tariff reductions both by action immediately following the conference and by a subsequent general review of the tariff. The result has been a marked lowering of duties over a wide range of British imports into New Zealand. Many duties on British imports have been abolished. In consequence the import of British manufactured goods has increased substantially 7., His Majesty’s Government in the United Kingdom will appreciate that even prior to Ottawa New Zealand’s tariff on British goods was approximately one-fourth as heavy as were the comparable tariffs of 'other Dominions. “We desire to re-emphasise that the economic development of New Zealand has been contingent upon the expansion of our main export industries. This expansion was necessary to provide the means of payment of interest on British capital invested in this Dominion, and it enabled us to purchase increasing quantities of British exports. This was a mutually 7 advantageous development.

“In the light of the foregoing and of the sympathetic consideration of His Majesty’s Government in the United Kingdom in the past we find it difficult to believe that the proposals for a levy on all meat imported into the United Kingdom from iNcw Zealand will provide a satisfactory solution. It would be discriminatory in its effects and would.involve New Zealand in serious economic loss. It would negative all. the adjustments made in New Zealand designed to reduce farming costs.

PRELIMINARY BEEF PROBLEM

“The position in regard to mutton and lamb has been satisfactorily adjusted as a result of the Ottawa Agreement. The difficulties facing the United Kingdom are not directly influenced by supplies of mutton and lamb. The problem in the United Kingdom as stated in recent communications is primarily related to beef, for which the demand of the British consumer lias been falling off, and it would appear that New Zealand’s share of the beef imports is -not such as would substantially affect the situation . “The imposition of the proposed levy would not only terminate the Ottawa Agreement, which New Zealand has made strenuous efforts to observe, but would also inflict severe and undue hardship on the sheep industry of this country. In fact, our mutton and lamb producers would be heavily penalised to assist in the solution of what is essentially a beef problem. ‘ ‘New Zealand regrets that it cannot voluntarily support the principle of a levy; and in the form proposed it is especially re-

pugnant to meat producers and to the people of the Dominion. New Zealand with a population of one and a-half millions, with the highest per capita external trade in the world, with meat exports amounting to a quarter of our total export values—-a proportion which is enormously greater than that of any other Dominion—would be called upon to carry a levy which is demonstrably a far greater burden to New Zealand than to any other British Dominion. We urge that the proposal is inequitable and discriminatory. SLENDER HOPE “In our view the hope that the meat supplying countries would agree amongst themselves to restrict supplies to suit the needs of the market for meat is slender, though if it is the wish of His Majesty’s Government in the United Kingdom New Zealand would, of course, be prepared to join in any discussions. We think that any agreement should embrace all suppliers if reasonable price stability is to be achieved.

“We consider that the proposal of the British Government would destroy the mutually beneficial results arising from the Ottawa Agrement. In the case of New Zealand it would be contrary to the policy of giving the Dominions more favourable treatment than that accorded to countries outside the Empire, since New Zealand is the least able among supplying countries to bear the disproportionate and onerous burden of. a levy. In addition we believe that the market would be heavily over-supplied, and this would involve a heavy fall in prices. Thus New Zealand’s economic position would be rendered precarious.

“The. long-term proposals of the United Kingdom Government in regard to meat, as expressed in your telegram of February 13* may react on our tariff policy. We fear that the proposal to impose a levy on all meats imported iinto the United Kingdom would so damage our external trade as to bring into prominence the whole question of tariff revision in New Zealand. This we are . most anxious to avoid.

“Finally we would emphasise very definitely that any contemplated action which may be construed as undermining the principles underlying the Ottawa Agreement should be avoided, and before the Ottawa Agreement as it stands is amended a formal conference should consider and approve of any alterations.” Commonwealth Reply FRANK STATEMENT PROMISED. CANBERRA, March 8. The export question will be set out fully and frankly in a statement in the House of Representatives next week when the acting-Prime Minister, Dr Earle Page, will reply to the British White Paper. It is reported that the Commonwealth Government regards the meat negotiations as a. test case for the whole of Australian industries.