TARIFF RELATIONS

Manawatu Standard, Volume IV, Issue 218, 15 August 1931, Page 9

TARIFF RELATIONS

NEW ZEALAND AND CANADA. DETAILS OF DISPATCHES. Dispatches that have been exchanged between the Prime Ministers of New Zealand and Canada in connection with the strained tariff relations between the two countries have been released for publication by Hon. G. W. Forbes. Tlie dispatches cover the period from the beginning of June, when it was announced that practically the whole range of Canadian imports would be deprived of the advantage of the British preferential tariff and placed on the general tariff list. In a cable message lie dispatched to tho Canadian Prime Minister, Mr R. B. Bennett, on Juno 9, Mr Forbes recalls that the conversations he had at Ottawa and London wore allowed to pass without any attempt on the part of tho Canadian Government to give detailed and effective consideration to the matter. He says he infers from a cable message received from Mr Bennett on May 29 that the Canadian Government did not regard itself as precluded from making a concession on New Zealand butter. Neither at Ottawa nor at London, nor indeed at any time subsequently, had he been given any definite understanding that such a concession could be made. Tire New Zealand Government would be happy to learn wdienever the Canadian Government considered the time opportune what concessions they proposed to make. “The New Zealand Government’s action,” contended Mr Forbes, “has not been taken, as you assume, on any special grounds of reciprocity, but on the ground that tlie New' Zealand Government are not disposed and, indeed, cannot afford to make remissions of taxation without corresponding advantages. It is their policy to encourage the importation of goods from those countries which themselves arc prepared to purchase New Zealand products. The New Zealand Government have, however, attempted to retain a true reciprocity with Canada bv providing for a remission of Customs duties on Canadian goods estimated to be at least equal to the Canadian remission of Customs duties on New Zealand goods.” DIFFICULT POSITION.

Mr Forbes said he appreciated the difficult position created between the two Dominions. “It is the view of the New Zealand Government,” he added, “that this difficulty is due solely to the action of the Canadian Government in tailing drastic steps against the New Zealand butter trade before any possibility of negotiations was afforded to the New Zealand Government, and to the Canadian Government's reluctance to enter into effective conversations. The difficulty is one which the New Zealand Government for their part are entirely willing to attempt to remove as soon as the Canadian Government find it possible to undertake definite negotiations to that end, and, as already advised, His Majesty’s Government in New' Zealand would welcome an early visit by a Canadian Minister for that purpose.

“Finally, may I point out that the session of the New' Zealand Parliament. which opens at the end of this month, will certainly be adjourned by November next, and probably ht an earlier date, and that therefore the implementing of any agreement not completed in time for action at this session would necessarily be ■ delayed until the session which should normally, commence in June, 1932.” On July 28 Mr Bennett replied to Mr Forbes in the following terms: “With reference to your inquiry as to prospects of early negotiations with a view to completing satisfactory trade arrangements, we may repeat that our Government is prepared now as at all times since assuming office to undertake negotiations to this end, but we must frankly answer your question by stating further that prospects do not appear promising if your Government maintains the attitude taken in recent telegrams and recent policy.

ABSENCE OF AGREEMENT. “You will agree,” continued Mr Bennett, “that tne fundamental difficulty not only during the past months, but for some years past, has been the absence of a direct agreement between New Zealand and Canada based upon full consideration of market opportunities and producers’ interests in both countries. In 1925 the Canadian Government in addition to continuing -British preferential rates, extended to New Zealand without seeking any special advantage in return the concessions granted to Australia under the Trade Agreement with that Dominion. It was olivious that concessions of this unilateral character, dependent on fortunes of agreement with anothef Dominion, did not afford a permanent basis of trade, and that in its own interests New Zealand might have been expected to seek a direct agreement. “The present Canadian Government, on assuming office in August last year, was faced with announcement of your intention to impose the former general tariff rates on Canadian motor cars, in consequence of notice given in April of termination of extention of the Australian trade agreement to New Zealand. While indicating that the obvious inadequate one cent, rate on butter could be revived, we did everything possible to provide for a personal discussion and negotiations of a comprehensive direct agreement in which provision as to butter would find an appropriate place. “We regret that on your journey through Canada to London, and in London, our discussions did not yield definite results, but so far as this was due to any factor other than lack of adequate time we must decline to accept more than a reasonable share of that responsibility. We suggested that your delegation should return through Canada, as was done by the Australian Minister of Commerce, in which case a comprehensive agreement might have been reached in time for action by both our Parliaments this session, and regret you could not adopt that course. The telegrams which have been exchanged since have been an inadequate substitute for personal discussion. “Your further objection that Canada extended during the past year more favourable rates on butter to Australia than to New Zealand overlooks the essential factor that in Australia’s case these rates were part of a definite agreement, the extension of which to New Zealand terminated on Octobear 12. In view of the fact that from October 1, 1925, to October 1, 1930, inclusive, tlie total Canadian importation of butter from Australia to which a low tariff rate had been accorded in return for Australian concessions on Canadian goods amounted to only slightly more than five million pounds, while importation from New Zealand which had made no agreement, and received concessions only indirectly, exceeded 96 million pounds, it is apparent that if any Dominion has grounds for complaint it is not New Zealand. UNFORTUNATE POSITION. “It is not our wish,” Mr Bennett concluded, “to spend further time in assessing responsibility for the unfortunate situation which has developed. Canada sets a high value on a close trading connection with New Zealand, both because of the value of the mar-

ket for our producers and because of the special friendliness which has always marked our relations. You are about to enter upon a general election; we assume it would not be appropriate or possible to enter upon negotiations at the present time.”

A further cablegram was dispatched to Mr Bennett by Mr Forbes on Wednesday last, August 12. In this Mr Forbes stated that during the course of telegraphic correspondence since April 12, 1930, the New Zealand Government have intimated to the Canadian Government on not less than seven distinct occasions their desire to enter into direct conversations. The Canadian Government for their part not only declined to postpone their drastic action against New Zealand butter until such time as negotiations could take place, but in point of fact before conversations were possible actually doubled the prohibitive rate originally proposed, and during a period of sixteen months they had taken no definite steps to accede to our repeated requests for a conference to discuss in detail the questions at issue.

“Indeed,” said Mr Forbes, “on the two occasions when New Zealand Ministers actually put themselves in personal touch with Canadian Ministers, the results entirely failed to convince the New Zealand Government of any desire on the part of the Canadian Government to enter upon effective discussions. BALANCE OF TRADE AGAINST NEW ZEALAND.

“Notwithstanding the fact that the balance of trade between the two Dominions was heavily against New Zealand, the New Zealand Government raised no objection to the arrangement existing prior to Canada’s termination of the extension to New Zealand but-

ter of the rates accorded to Australian 1 butter, though it would seem plain that if either Dominion had ground for complaint owing to the absence of such a trading agreement it was not Canada. “The New Zealand Government share your view that telegrams are an inadequate substitute for personal discussion, and with you they appreciate the futility of spending further time in assessing the responsibility for the unfortunate situation that has de- ■ veloped_, though they must be allowed to retain the views f,bey have already expressed in this connection. They note with regret, however, that the Canadian Government regard the forthcoming general election in New Zealand as necessitating a further delay in the initiation of conversations, i “The New Zealand Government do not share this view and they must accordingly reiterate their continued willingness to receive a Canadian Minister at the earliest possible date and their desire to enter into negotiations ! with the least possible delay. They j have, however, no option but to await

a notification from the Canadian Government as to when a definite date for the contemplated discussions can be fixed.” *