THE SOUTH AFRICAN TREATY.

New Zealand Herald, Volume LIX, Issue 18235, 31 October 1922, Page 6

THE SOUTH AFRICAN TREATY.

The revival, in an amended form, of the reciprocal tariff treaty with South Africa, which has been suspended since August 1, is a concession to a sentimental tradition, of which the material advantages are chiefly in favour of South Africa. The fiscal policy of the Union is based on preference to British goods, which is extended only to those Dominions that make reciprocal concessions. In the case of New Zealand the concessions that have operated since 1907 went further than the British preferential tariff, for in addition to a small list of special items, a rebate of 3 per cent, was allowed by both Dominions on all goods except spirits. Soujth Africa' 3 purchases from New Zealand are very small, the duties remitted under the treaty being only £20 in 1919, £64 in 1920 and £12 in 1921, whereas New Zealand remitted duties totalling £14,800 in 1919, £18,495 in 1920 and £14,893 in 1921. In recent years the principal imports have been wines and unmounted precious stones, the latter being duty-free. But the treaty created a double embarrassment, which compelled the New Zealand Government to terminate it. For years complaints have been made by Australia against the advantage given to South African wine, and that grievance had to be removed as a preliminary to negotiations for reciprocity with the Commonwealth. Then latterly the Customs Department became alarmed by information that factories were being established in South Africa to manufacture Virginia tobacco, imported from America, for the New Zealand market, for which the treaty would secure admission at the rate of 2s per lb. instead of 4s 8d per lb. and 10s for cigarette tobacco. At the outset the South African Government was not inclined to.admit the

objections on these points, but the New Zealand Government terminated the treaty, and agreement has now been reached on lines that will be acceptable to the three Dominions. The duties on wine have been raised to sixpence less than those on Australian wine, the difference representing the freight. This proposal was accepted by Australia during the recent negotiations. Tobacco has been placed on the British preferential scale, without any concession for Boer leaf, which was the original intention of the treaty. In other respects the former terms of the treaty stand, including the 3 per cent, rebate off British rates. There may be some doubt as to the wisdom of continuing this concession, which in practice is a privilege enjoyed only by South Africa without any material return. Nevertheless it is not prejudicial to other parts of the Empire.