BARTER PROPOSAL

King Country Chronicle, Volume XXX, Issue 4812, 22 February 1936, Page 6

BARTER PROPOSAL

CONDEMNED IN AUSTRALIA. GERMANY’S TRADE BALANCE. Sydney, February 13. Barter between private individuals or firms in Australia and Germany may be proceeding on terms mutually satisfactory, but Australia seems to be determined not to make any official arrangement. That is the effect of a statement made by the Minister in charge of negotiations for trade treaties (Sir Henry Gullett), who> in a long statement, denounced the proposal. His statement was made as a result of news that certain firms were negotiating for the barter of German motor cars and parts for Australian wool, and desired the Government to assist them. “In July last,” said Sir Henry Gullett, “when negotiating with the German Government in Berlin, I made it completely clear that the Commonwealth was not prepared to negotiate towards such an agreement. If Australian wool, with the approval of the Commonwealth Government, was sold to Germany on a £ for £ basis in exchange for German goods, nothing is more certain than that all other great wool-buying countries would demand similar terms. If the practice became general, Australia would have the alternatives of having on its hands 60 or 70 per cent, of its unsold wool, or the closing or crippling of half its secondary industries. Value of Local Market. “There are possibly a few people still remaining in Australia who would look without serious concern upon such a blow ‘’at our secondary industries. No thoughtful pastoralist, however, can take such a view. One need only mention that, for every five sheep and lambs slaughtered in Australia, four are consumed by Australians, and of every four head of cattle slaughtered, three are locally consumed. Our primary producers generally, including the woolgrowers.

are to-day far more dependent than is always recognised upon local markets created very largely by secondary industrial development. “Overseas buyers of wool, with the single exception of Germany, freely recognise that their purchases cannot be balanced by sales of manufactured goods to Australia. The trade treaty policy of the Government, while preserving Australian industry and maintaining British preferences, aims at taking all possible steps to promote good will with our best customer countries, by giving them access to our markets. More than that we cannot do.

The Motor Industry. “The German proposal for the import of essential parts of motor cars from Germany, however, goes much further than the request for barter on a £ for £ basis. It also includes a request for the British preferential rate of duty, or, failing that, a reduction of the preferential margin, also a request that in arriving at value for duty the exchange rate should be adjusted as between Australian currency and gold. The acquiescence in the,

first request would mean, of course, that similar terms would have to be given to the goods of all wool-buying countries; in other words, the Ottawa Agreement would cease to exist, and with it our preferential position in the United Kingdom market. Incidentally, the United Kingdom absorbs about 90 per cent, of our total exports of primary products, with the exception of wool and wheat, and is the heaviest individual buyer of those two commodities. The suggested adjustment of exchange between the Australian £ and gold would mean the recasting of the Australian tariff'and would destroy the British preferential system.

A Discrepancy. “It is difficult in the light of Australia’s trading balance with Germany over the last year or two to understand the German contention that the the absence of German credits in Australia is responsible for her failure to participate more strongly in wool sales. During the 15 months ended September, 1935, Germany’s sales to Australia reached a value of £3,566,000 (Australian currency). During the same period her total purchases, including wool, reached a value of £2,056,000 (Australian). That left Germany with an unexpended Australian credit of £1,510,000, which one must assume is on deposit in Australia, or has been transferred for the purchase of commodities in other countries. Why, then, all this declaration that if we do not enter into special barter with Germany, she can buy no more wool? Germany's exports to Australia have recently been showing a steady increase. “The Commonwealth Government is prepared to negotiate with Germany in the friendliest way, along the same lines that it is negotiating with other foreign countries. The negotiations in Berlin were carried on in a most cordial spirit, and I am looking forward to their resumption with the German Consul-General when he arrives in Australia from Berlin next month, carrying with him fresh instructions from the German Government. The Commonwealth is deeply conscious of the great value of the German market in past years, and every effort will be made to come to some satisfactory treaty arrangements, which may have the effect of restoring her purchasing activities.”