H.B. TRIBUNE THURSDAY, DECEMBER 10, 1931 TRADE WITH CANADA.

Hawke's Bay Tribune, Volume XXI, Issue 306, 10 December 1931, Page 6

H.B. TRIBUNE THURSDAY, DECEMBER 10, 1931 TRADE WITH CANADA.

Next week our Minister of Finance and Customs, the Hon. W. Downie Stewart, is to set out for Honolulu to meet there the Hon. H. H. Stevens, the Canadian Minister of Trade and Commerce. The purpose in view is to put an end to the unfortunate impasse that has arisen between the two countries on the subject of Customs tariffs and in this relation to place matters on a mutually satisfactory basis. Most of us are aware of the facts that have led up to the present position and placed the Big and the Little Dominion at virtual arm’s length so far as reciprocal trade is concerned. Almost as soon as the latest general election in Canada placed the present Government in power, under the Hon. R. B. Bennett, an import duty of 4 cents—subsequently raised to 8 cents—a lb. upon New Zealand butter was announced. Tentative representations from New Zealand as to the discriminating character of this imposition having failed of effect, the New Zealand Governmen retaliated by withdrawing from Canada the benefit of the preferential tariff she enjoyed here in common with Great Britain.

Those are, of course, merely the bald facts as generally known. Digging down a little further, we find the motive behind the Canadian action. Owing again to tariff differences, the outlet for Canadian cream and milk into the United States, which took nearly all Canada could supply, was effectually blocked. The consequence 'Was that the Canadian dairymen had to turn their attention to converting their raw material into butter and cheese for the home market. This naturally led to an appeal to their Gov ment by the dairymen, as by on:' own wheatgrowers here, for a substantial measure of protection.

It was largely upon a definite promise of this that Mr. Bennett won the election and got himseii into office. As butter formed by fir the major part of our exports to Canada and the duties imposed upon it were practically prohibitive, the fulfilment of this election promise threw the balance of trade between the two countries entirely out of anything like equilibrium. New Zealand’s somewhat hasty retort has, of course, had the effect of keeping Canadian manufactures off our market. Thus, while the balance in value of the exchange of products has been to some extent restored, it has been at the sacrifice of a very considerable trade that was mutually beneficial. That this should occur between two members of the British Commonwealth of Nations at a time when we are all being adjured to assist in promoting intra-Imperial trade cannot be regarded as anything but a serious misfortune. At the same time, it must be recognised that, allowing Canada the right to protect her own producers, there must necessarily be a good deal of difficulty in arriving at a satisfactory adjustment, more especially as our exports are so largely restricted to the one line. There is also another important factor in the case that has to be taken into consideration. That is the very strong control which the immensely powerful meat packers’ oraganisation exercises over the marketing and distribution of both local and imported dairy products in Canada. Unless matters in this respect have! changed very materially in recent years, this amounts, as with meat, to a virtual monopoly. It is against the unseen influence of this organisation almost as much as against the election commitments of the Canadian Government that our Minister will have to contend in his negotiations. There can be no doubt but that, given anything like a fair field, the admittedly superior quality of New Zealand butter would soon win for it a much wider market than heretofore in Canada, even if burdened with some substantial measure of import duties. But that fair field is not likely to be secured so long as the Canadian meat packers maintain their grip on the internal trade in dairy products. Under them, with their widespread practice of "blending”— not infrequently with margarine and the like—New Zealand but ter can have but little hope of establishing for itself the distinct identity that would most assuredly increase its consumption among those who can afford ti pay a little dearly for an article of high quality.