TARIFF AND PREFERENCE.

New Zealand Herald, Volume LXV, Issue 19918, 11 April 1928, Page 8

TARIFF AND PREFERENCE.

The several purposes of last year's revision of the customs tariff included the diversion of trade from foreign to British countries, by widening the margin between the preferential and the general tariffs. Several estimates have been given of the consequent advantage to Britain, but none of these has been so high as the figures presented recently by the Secretary of the Department of Overseas Trade. In a highly appreciative reference to the new tariff as "a most practical expression of Empire partnership," Mr. Hacking said that the effect of the changes would be that Britain would now sell to New Zealand £2,000,000 worth of manufactures more than under the old tariff, while in two or three years British exports to the Dominion should increase by £4,000,000 or £5,000,000 annually. The significance of these calculations, which are presumably based upon a careful study of the tariff, may be illustrated by their application to the import statistics. During the last five years the value of imports has averaged £47,800,000 annually, including an average of £23,120,000 from Britain. The diversion of £2,000,000 worth of orders

from foreign countries to Britain would raise Britain's share of our trade from 48 to nearly 53 per cent. That would be a much higher proportion than has yet been attained. The suggestion that the tariff will in a few years influence trade to the extent of four or five millions is, however, so surprising that it would be interesting to know upon what data the forecast has been based. While this use of the tariff to promote trade within the Empire accords with national policy and popular sentiment, and while British appreciation and prediction of substantial results are gratifying, it cannot be overlooked that the means employed promise very little relief to consumers. Following the example of its predecessors, the Government subordinated other -considerations to the revenue aspect, and instead of reducing the duties on British goods, except in a few instances, it increased the margin of preference by raising the general tariff. Hence, even when British imports are substituted for foreign, their prices will probably reflect the increases in the surtaxes. According to the only official estimate, the effect on customs tariff was calculated to be a reduction of £IBO,OOO. Whether that modest concession will be accompanied by a substantial reduction in the cost of imported commodities is doubtful.