THE H.B. TRIBUNE THURSDAY, JUNE 4, 1936 JAPAN AND AUSTRALIA.

Hawke's Bay Tribune, Volume XXVI, Issue 145, 4 June 1936, Page 6

THE H.B. TRIBUNE THURSDAY, JUNE 4, 1936 JAPAN AND AUSTRALIA.

The rather intemperate threats of direct reprisal with which Japan has met the new protecting tariff announcements of the Australian Government afford a good instance of the difficulties which beset those who attempt the regulation of international trade. The Federal Government, partly by way of fostering intra-Impefial commerce, and partly by way of protection of its own secondary industries, has placed heavy, in some cases almost prohibitive, duties upon competing Japanese wares produced under conditions that enable their sale at prices entirely unremunerative under conditions that hold in British communities. This, perhaps very naturally, has aroused marked resentment on the part not only of Japanese industrialists but also of the Japanese Government, which has hastily said that it will mean a serious curtailment in Japan’s purchases of ’Australian wool. Here, of course, is matter of grave concern to Australian pastoralists, whose interests thus come into direct conflict with those of Australian manufacturers, and British

Japan has within quite recent years come to be one of the biggest buyers of Australian wool, and her withdrawal from the auctions would almost necessarily mean a serious slackening in the bidding. Just now, even with the rapid expansion that has taken place in Japanese manufactured exports to Australia, the balance of trade still strongly favours the Commonwealth. For the financial year that there ends with this month it is estimated that the value of Australian exports to Japan will exceed that of imports from that country by something like £7| million—a figure that gives some idea of the importance of Japanese competition in the wool market.

Japan, it may be said, some time ago, recognised the reasonableness of Australian representations made with regard to some of her exports, rayon in particular, and voluntarily imposed a levy upon them so as to bring prices somewhat into line. These, however, have not proved sufficient for the protection of either Australian or British products of a like kind, while with regard to others no such step has been taken.

In connection with cotton goods in particular the Japanese have

already practically ousted Great Britain from markets which she had come to regard as peculiarly her own. The consequence has been that a very large proportion of the Lancashire cotton mills are either idle or running a long way below capacity, with the result that scores of thousands of British operatives are either out of employment or working only half-time. Under the still higher standard of living that holds in

Australian factories successful competition with Japanese products is entirely out of the question, excepting under a high scale of protective tariffs. It is to these that the Commonwealth Government has now taken recourse as a mere matter of self-preservation. How far Japan would be able to go in the way of carrying out her threat regarding wool purchases it is difficult to say, but possibly not very far without greatly prejudicing some of her own established industries. She has indicated that she will turn more to South Africa, New Zealand and South America to secure her requirements, but it must be very, doubtful whether these can supply cither the quantity or the class of wool she wants. Thera is also a definite movement towards growing her own wool, in both Japan itself and in Manchukuo, but climatic and other conditions are said to be by no means favourable to this development, and, in any event, it would not reach any menacing proportions for some considerable time. Latest messages indicate sonic modification of the first stand taken and the Federal Prime Minister would seem to be hopeful that some better underhtanding will be reached as the result of further and more friendly discussions.