QUID PRO QUO

Hawke's Bay Tribune, Volume XXII, Issue 258, 14 October 1932, Page 6

QUID PRO QUO

* TARIFF CHANGES ONLY FOUR ITEMS. CLOTHING, SWEETS AND SILK. Wellington, Oct. 13. Concessions made by New Zealand in the way of changes in the Customs tariffs were referred to in the following terms by the Rt. Hon. J. G. Coates in his Ottawa statement in the House to-night:— “Generally, our undertaking is that 'protection by tariffs shall be afforded against United Kingdom products only to those industries which are reasonably assured of sound opportunities for success’. We agree to institute an enquiry into existing protective duties (at which enquiry United Kingdom producers will have facilities for expressing their views) and where necessary we will reduce protective duties to such a level as will place the United Kingdom producer in the position of a domestic competitor—that is, to quote tne text of the agreement they will be reduced to a level ‘which will give the United Kingdom producer full oppcrlinity or reasonable competition on the basi:. of the relative cost of economical and efficient production.’ “We agree also to remove at once the surtax on goods produced in the. United Kingdom and, when financial conditions permit, to remove the primage duty of 3 per cent ad valorem. These were imposed, it will be recalled, for revenue purposes and not for the protection of local industries. AGREED LIST OF CHANGES. “Turning now to the detailed changes in our Customs tariff, to which wo are committed by the Ottawa agreement, and which will be placed before the House to-night in the form of Customs resolutions, the agreed list of changes in duties levied on United Kingdom manufactures is as follows:— Confectionery, reduce from 30 per cent to 27} per cent; apparel and readymade clothing, 32} per cent to 27} per cent; hosiery, 32} per cent to 27} per cent; silk and artificial silk piece goods, 10 per cent to free. “That is the whole list. It is not an extensive list. Moreover, it is to be noted that by legislation passed by Parliament in 1931, the duty on apparel and hosiery was already to be reduced to 27} per cent as from April 1, 1933, and the duty on silk piece goods was to be abolished as from that date. As far as those two items are concerned, therefore, the result of the Ottawa agreement is to anticipate by a few months tariff changes which have already been approved by the Legislature PREVIOUSLY PROVIDED FOR. ' “It will be noticed from the resolutions that it is proposed to reduce the general tariff on the last three classes of goods previously mentioned to the level provided for in the 1931 legislation. It is also proposed to make are duction in the general tariff on confectionery. It was generally recognised <it Ottawa that the rates of duty under the New Zealand general tariff were too high and clause 10 of the agreement allows New Zealand the right to maintain the existing margins of preference where less than 20 per cent ad valorem and where these margins at present exceed 20 per cent to reduce •hem to that figure. The relatively high duties now imposed on many lines of foreign goods do not confer any real benefit on United Kingdom traders and merely tend to keep up the cost of living and the cost of production here.

“With particular reference to apparel and silks it has for some years been the settled policy of New Zealand tariff legislation that when any alteration is made in the duty on United Kingdom apparel a reduction should also be made in the duty on foreign silk so that our local manufacturers

using silk piece goods will not be prejudiced. “Honourable members will observe that the resolutions are silent respecting Australia. This is due tq the fact that the present duties on Australian apparel, hosiery, silks and confectionery are under the existing agreement with the Commonwealth not greater than the duties now proposed to be levied on United Kingdom goods. COLONIAL PRODUCTS. “In addition to the foregoing reductions in our customs tariff insofar as United Kingdom products are concerned, certain changes are agreed to with respect to imports from non-self-gov-erning colonies. These also are dealt with in the Customs resolutions which are to eome before the House to-night. The list is as follows, and the agreement here takes the form not of prescribed maximum duties but of a guaranteed margin of preference in favour of colonial products:—Asphalt, margin of preference, 10 per cent ad valorem; cigars, 2/- per lb.; cocoa, }d per lb.; coffee, Id per lb.; rum, 4/- per proof gallon; unground spices, viz., cinnamon, cloves, ginger, mace, nutmeg, pepper and vanilla, 10 per cent ad valorem. “At present asphalt, cocoa beans, raw coffee, the unground spices mentioned and printing and writing paper in sheets which are in effect the papers covered by item 300 (2) (b) are free of duty under both the British Preferential and General Tariffs. The preference on cigars is to be granted by a reduction of the duty on British made cigars by 1/- per lb. and an increase of the duty on foreign cigars by the same amount. As practically the only cigars of British origin now imported into New Zealand eome from the United Kingdom it is proposed to extend the concession to all British-made cigars. The preference on rum is to be arranged by an increase in the foreign rate of 4/- per proof gallon. THE PRIMAGE DUTY. “One of the resolutions to be introduced provides for the abolition of the primage duty on Australian goods except the 3 per cent, ad valorem imposed last year on practically all classes of (British or foreign) goods which were otherwise free of duty. This action is taken because it is considered that under the Tariff Agreement with the Commonwealth such primage duty cannot be charged on Australian goods when the surtax on similar United Kingdom goods is abolished. This will simplify the tariff so far as primage duty is concerned, which is at present in a very complicated state. “New Zealand manufacturers mayfeel that, owing to the abolition of surtax, the primage dutv of 3 per cent, on raw materials otherwise free of duty should be abolished. Financial conditions do not at present permit of this ’ concession but industrialists can rest assured that as soon as possible primage duty will be abolished. In the meantime oui manufacturers have the advantage of the 10 per cent, exchange on the difference between the cost of raw materials and the value of the imported finished article. “With respect to the effect of the proposed change in the revenue of the j>ominion it is estimated that for the remainder of the present financial year there will be a reduction of about a quarter of a million.”