FRUITLESS NEGOTIATIONS

New Zealand Herald, Volume LXVIII, Issue 20888, 2 June 1931, Page 10

FRUITLESS NEGOTIATIONS

, ACTION MADE IMPERATIVE. PROHIBITIVE BUTTER DUTY. NEW ZEALAND HANDICAPPED. RESTORING TRADE BALANCE. fllY TELEGRAM. —TOESS ASSOCIATION.] WELLINGTON, Monday. The decision of the Government to place the majority of Canadian goods entering New Zealand on the general tariff list is a sequel to negotiations wl ich have been goinu on between the two Govj. ernments ever since Canada decided to incerase the duly on New Zealand but ter from one cent to four cents a pound about j the middle of last year. Although it had been agreed that conversations should take place between the two Governments when the Prime Minister of New Zealand, the Rt. Hon. G. W. Forbes, was in Ottawa on his way to the Imperial Conference, on the day lio arrived in the Canadian capital the duty on New Zealand butter was ini( creased to eight cents a pound. An a result of New Zealand then imposing additional tariffs on Canadian motor vehicles, tyres and engines, trade in these commodities between the two Dominions fell away to practically nothing. Details of the Exemptions. Imports from Canada which will be excluded from the increased duties will be gum boots and certain classes of paper tind wire. In addition, no alteration has been made in tariffs on Canadian rubber tyres, motor vehicles and engines, tha duty on which was increased last August. The attitude of the New Zealand Government is revealed in a cablegram sent by Mr. Forbes to the Prime Minister of Canada, Mr. R. B. Bennett, on May 26. ]n this Mr. Forbes makes it clear that lie is unable to expect anything from further negotiations at present, although lie expresses the hope that a Canadian Minister will be able to come to New Zealand to discuss the situation as soon as possible In his cablegram to the Canadian Prime Minister, Mr. Forbes outlines the tariff / position as it exists at present between the two countries and points out the disadvantages from which New Zealand is suffering. The cablegram is as follow siEffect of Butter Tariff. "I much regret that the Canadian Gov- ' eminent arc unable to make any concessions on New Zealand butter. The New Zealand" Government have attached the gieatst importance to the tariff treatment of this commodity in view of the fact that it has accounted for 80 per ctnt. of the value of New Zealand's exports to Canada and has helped materially to reduce the otherwise heavy adverse trade balance of this Dominion in respect .of Canada. lam unable to understand your z statement that direct purchases of wool from New Zealand by Canadian manufacturers will in the near future equal the value of the former butter trade between New Zealand and Canada. In this connection J am advised: — " (1) That importations of New Zealand butter into Canada in the year 3929 1930 amounted to over 13,500,000 dollars (£2,700,000). •' (2) That -during tlio year ended March, 1930, the total Canadian importations of unmanufactured wool from all countries (including New Zealand) Amounted to just over 4,000,000 dollars ' (£800,000) and that the importations of such wool during the last nine months of 1930 showed a fall of more than 40 per cent, as compared with the corresponding period of the preceding year. / No Comparison in Values. " Even, therefore, if New Zealand were to provide the whole of the Canadian imports of such wool it would not appear to be possible that the value could approach in the near future tho value of New Zealand's former butter exports to Canada. It is agreed that there may be considerable purchases by Canada of New Zealand goods through oilier countries, (tu the other hand there are considerable purchases bv New Zealand of Canadian goods through other countries. " The. position generally appears to the Government in New Zealand as follows: — " (1) On the decision of the Canadian Government in April, 1930, to denounce Ihe then existing arrangement under ■ which New Zealand butter was allowed entry into Canada on the same terms as Australian butter, namely, 1 cent per pound, the New Zealand Government, after calling attention to the heavy balance of trade in favour of Canada immediately agreed with the suggestion (and has continued to urge) that direct negotiations should take place between the two Dominions and requested the matter to be , left in statu quo until conversations co lid be initiated.

<2) As the Canadian Government were apparently unable to send :i Minister to New Zealand for negotiations it, was Agreed that conversations should be opened during my presence in Canada in •September, en route to the Imperial C ion - ference.

(3) Tn tlm meantime, however, the Canadian Government thought it, desinble to make effective the proposed incrcasi in the tariff on New Zealand butter from 1 cent to 4 cents.

" (4) In addition, on the day of my arrival in Ottawa, this rate of '4 c = lits was increased to 8 cents.

Notwithstanding the increase of 700 per cent, in the Canadian tariff on New Zealand butler, Australian bitter

continued for a lengthy period to be admitted at the old rate, 1- cent per pound, and, it is understood, is still being admitted at a much more favourable rate than New Zealand butter. " (6) It is understood also that the Canadian Government, in addition to this increased tariff rate on New Zealand butter, are imposing a dumping duty of a novel character if butter is sold or landed below the price arbitrarily fixed by the Canadian Government. " (7) As a direct result of these penal measures the export of butter from New Zealand to Canada has been almost completely terminated. The inference that New Zealand butter still enjoys the benefits of the British preferential rate is clearly illusory, that rate having now been fixed at such a figure as to be prohibitive. " (8) The conversations at Ottawa were entirely ineffective, the Canadian Government being unwilling to alter the increased tariff on butter, and not yet in a position to enter into detailed tariff negotiations in general. " (9) Further conversations in London were equally ineffective. (10) Subsequent communications indicating the New Zealand Government's willingness to continue negotiations and their invitation to the Canadian Minister to visit New Zealand for this purpose have led to no definite result. Discussion Always Sought. " (11) More than 12 months have elapsed sinco the Canadian Government's notification of the intention to impose a prohibitive duty on New Zealand butter entering Canada. The Government of New Zealand at all times have been willing and anxious to discuss in detail trade relations between New Zealand and Canada, but, in view of your reply of the 14th instant to my telegram of March 18, the New Zealand Government have been forced to the conclusion that there is no immediate prospect of detailed negotiations or any effective mitigation of the unsatisfactory treatment cf New Zealand butter in Canada. " (12) Strong pressure has for years been brought upon the Government of New Zealand to increase the duties on many lines of Canadian goods, of which more than sufficient for local requirements could be produced in New Zealand. These requests have consistently been refused on the ground that mutual sacrifices are necessary to develop inter-Imperial trade. For similar reasons repeated requests to impose a dumping duty on specific Canadian imports have been refused. " (13) The Government of New Zealand are now at a time when economic conditions in New Zealand are particularly difficult and are faced with the position that substantial remissions of duty arc granted here on Canadian goods without corresponding advantages to New Zealand. Present Position Impossible. " (14) The New Zealand Government are obliged to consider increased taxation to balance the Budget and it will bo impossible to maintain the present position after June 1. " (15) The Government of New Zealand therefore intend on that date to increase the duties on many lines of Canadian goods, but so that remissions made here and the resulting trade are not less than remissions now estimated to be made on New Zealand goods entering Canada and the trade resulting therefrom. " (16) The Government of New Zealand would still welcome early negotiations to end the present unsatisfactory position, and, as already advised, would be happy to receive a Canadian Minister here for that purpose at the earliest possible date.

" (17) In view of the fact that the New Zealand Government have at all times been anxious to enter into effective conversations on Canadian-New Zealand trade, and continued requests have been made in New Zealand for information as to the progress of negotiations, I propose to publish the text of this telegram on Juno 1."

CARGO FROM CANADA. FIRST STEAMER IN PORT. UNTIMELY DELAY BY WEATHER. Delay caused by stormy weather off the New Zealand coast has involved the payment of the new duties on any affected articles brought by the Canadian National steamer Canadian Cruiser, which arrived at Auckland from Halifax early last evening. The steamer was originally due at mid-day yesterday, but stormy weather retarded her progress and she did not anchor in the stream until 6.50 last evening, her berthing being postponed until this morning. Had the Canadian Cruiser ai rived on schedule there would have been time for her cargo to be cleared under tho old tariff) but now it will be subject to the revised rates. The Canadian Cruiser, the first, vessel from Canada to be affected, has cargo for Auckland, Wellington, Lyttolton and Dunedin. Two other vessels from Canada are now on the water carrying goods for Auckland—the Royal Mail liner Niagara, from Vancouver, due on Juno 15, and the Canadian Transporter, from Eastern Canadian polls, due on June 30. TRADE WITH AUSTRALIA. GOVERNMENT'S ACTION. Preliminary conversations concerning a reciprocal trade agreement between New Zealand and Australia have already taken place, the Prime. Minister, the lit. Hon. (!. W. Forbes, has stated in a letter replying to tho representations of the Auckland Chamber of Commerce. Under the circumstances, it had not been found possible to arrange a meeting of representatives of the two countries.