Are Tariff Walls Too High?

Horowhenua Chronicle, 20 December 1932, Page 3

Are Tariff Walls Too High?

MR COATES REPLIES TO MANUFACTURERS

WELLINGTON, Last Night. “I do not grudge any company its reasonable profits but I believe by avoiding excessive protection ' and by correcting any undue margin in costs and prices we are helping to restore industry to a normal profitable basis again,” said Mr. Coates replying to a statement by the Canterbury Manufacturers’ As-* sociation published last Saturday. The association’s statement was in reply to remarks made in the House by Mr. Coates to the effect that the prices ox woollen goods made in New /.eaiaua were excessive. It was stated in retort on behalf of the manufacturers that they were not afraid of competition from abroad quality for quality. The reply by Mr. Coates is as follows: —“It will be recalled that among the objections to New Zealand ratifying the Ottaw T a agreement under which substantial and much-needed advantages are given to the Dominion was the charge that local industry was being sacrificed. The alleged sacrifice was the removal of the surtax on goods imported from tlie United Kingdom and a few small reductions in tariff rates. The surtax was nine-fortieths of the previous duty and as has been repeatedly proved it was imposed for revenue purposes and not on the ground of additional protection. “I did not believe, and it certainly was not shown, that the existence of any Now Zealand industry was menaced by the tariff changes that were agreed to. I believe that a far greater menace to all industries arises from tne general blockage in trade in which tariffs play a part, and Ottawa represented a welcome move toward the removal or lowering of the obstructions to' trade. That is my general reason for insisting that the Ottawa agreement marked a forward move and for my looking with some impatience on the petty objections that were raised against its ratification.

"We agreed at Ottawa that New Zealand’’s protective tariff against United Kingdom goods should be confined to those industries which were reasonably assured of sound opportunities for success and United Kingdom producers are to be given an opportunity of ‘ reasonable competition f on a basis of the relative cost of economical and efficient production. ’ These are the words used in the agreement. In my view ii is in our own interests that such a test should be applied and that we should avoid drifting into the position of having such ridiculous arid burdensome tariffs as' those which some

Dominions and many countries in the

world have built up.

“Here in New Zealand pid elsewhere there is the clearest evidence that wholesale prices have fallen to a much greater extent than retail prices. A move toward closing that abnormal gap is necessary if we are to adjust ourselves to the changed conditions.

"I have ahvays held that manufacturing within our own country should be encouraged, but in the interests of producers and consumers alike this should be on a sound economic basis. Efficiently conducted industries and businesses have nothing to fear from th'c Ottawa agreement or from any action might be taken to implement it. ’ ’ :

In conclusion Mr. Coates said he

appreciated the part which local mills took m utilising New Zealand wool production and the importance of strengthening this to the utmost. At the same time the figures showed that only 2i per cent, of our wool production found a local market' and for the disposal of the great bulk of our clip the Dominion depended on sales to the United Kingdom.