THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, NOVEMBER 30, 1927. BUTTER AND TARIFFS.

New Zealand Herald, Volume LXIV, Issue 19807, 30 November 1927, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, NOVEMBER 30, 1927. BUTTER AND TARIFFS.

New Zealand butter, however acceptable to tho consumer, does not receive an undiluted welcome in either of two countries where there is a promising market. In both Canada and Australia the dairying industry professes alarm at the competition threatened by Now Zealand butter. The Australian Tariff Board, indeed, has officially recommended that tho duty on it should be raised to sixpence a pound, for tho protection of the dairy farmer, who, it is said, needs a return of Is lid a pound to give him a profit. A Canadian cablegram says that the dairy interests are urging the imposition of a dumping duty on New Zealand butter. There must be some confusion here, for it is at Australian butteT that tho dumping duty has been aimed The Patcrson scheme has been interpreted as an export bounty, justifying the procedure. Since New Zealand has no such method of making a difference between export and domestic price, there is not that excuse for putting a dumping duty on imports of butter. Still the uneasiness of Canadian dairymen has been shown before, and an effort to obtain protection against New Zealand competition is likely enough, by whatever name the duty may be called. If these efforts against, the Dominion's produce succeed, the result may be detrimental to the export trade with two important neighbours. It will bo unfortunate, coming at a time when increasing output makes the development of new markets important. The possibilities are serious enough to justify reconsideration of New Zealand's own fiscal policy as affecting trade with the Empire as a whole. The preference granted by NewZealand, since first it was incorporated in the tariff, has been to goods of Empire origin, regardless of the actual Dominion or colony from which they came. It has been been wider than preference to the products of the British Isles. Until a few years ago there was no modification of this principle. Australia did not interpret preference in this broad way. Across the Tasman it has been the policy to confine preferential duties, to goods imported from Great Britain. Thus New Zealand gave to Australia much more than was received in return. In the tariff revision of some five years ago Australia was deliberately deprived of a benefit which worked so onesidedly. A brief experience of hav ing her goods assessed for duty on the foreign scale induced the Com monwealth to make a reciprocal trade agreement with New Zealand. One of the items in this was the admission of New Zealand butter on payment of a duty of 2d a pound. This, with the fcranstasman freight, would be adequate protection but for the Paterson scheme, which, rais ing domestic prices threepence above the London parity, practically eliminates the duty under the agreement. To these circumstances can be traced the Australian agitation for an increase, which has convinced the Tariff Board that the change should be made. The position is not the same with Canada. There is no trade agreement, and Canada has not. like Australia, learned that to be placed on the foreign schedule by New Zealand might, have considerable results. If Canada decides on a duty inimical to the export trade from New Zealand there will be every justification for facing squarely the question of modifying the present almost universal Empire preference New Zealand is under no obligation of any kind to make her preferential tariff effective for the whole Empire. Australia, as already mentioned, does not. Canada, while making certain exceptions, does. New Zealand being one of the favoured countries. But New Zealand, as figures will presently show, buys immensely more from than she j sells to Canada. When, therefore, these two countries propose to discriminate specifically against one of New Zealand's principal exportable commodities, the Dominion is surely in an excellent position for protesting or for bargaining. Preference given to Britain is given to New Zealand's best customer for butter and almost every other article sold abroad. The returns for 1026 show that the United Kingdom bought from New Zealand goods valued at £35,102,000 and sold to the Dominion merchandise worth £24,331,000. On the other hand, exports to Canada were valued at £861,700, imports from Canada at £3,431,500. The balance in favour of Canada is immense, and tho preferential duties undoubtedly help to make it so. Atis tralian exports to New Zealand were worth £5,060,000. of which £4.625.200 represented Australian goods, the balance re-exports. New Zealand goods imported were worth £3,051,400, the disparity again being significant, though in this instance any advantage Australia enjoyed over foreign rivals came through an agreement directly negotiated. The deduction from these facts is that if Canada and Australia do discriminate against New Zealand dairy pro duce, if New Zealand cares to make practical protest by retaliating, the advantage in the contest is all on the side of this Dominion. It is to be hoped such necessity will not arise, but it is quite legitimate to consider whether the New Zealand dairy farmer should not have something done for him in face of threats against two very promising markets for his output.