CURRENCY AND TARIFFS.

New Zealand Herald, Volume LXIX, Issue 21086, 21 January 1932, Page 8

CURRENCY AND TARIFFS.

A plain warning that export trade cannot depend upon the competitive advantage of depreciated exchange is to be found in to-day's cable messages. By emergency decree, Germany has proceeded against goods from countries which have depreciated currencies, ' especially against those from Britain and Denmark, because of their departure from the gold standard. The message states that this will be a blow to the Australian and New Zealand butter trade, both because of the narrowed German market and because of the keener competition—of course from Denmark —in the British market. But to New Zealand, now racked with arguments about the exchange position, there is an even more direct warning. Further depreciation could be expected to bring on New Zealand exports the full weight of German dumping duties. Germany is an important customer for New Zealand wool, with buyers at all the sales. If severe excluding duties are placed on it because New Zealand currency, in termg of exchange, has become seriously depreciated, the competition of German buyers must cease, and one vital factor helping to prevent prices from falling lower than even the present tragically low levels will disappear. Has the sheepfarmer, endorsing the general claim of primary producers to have the exchange depreciate to the Australian level, counted that possibility? But the dangers are not confined to wool. New Zealand honey, the export commodity said to have suffered least in the depression, has won high favour in Germany, and has sold readily there. How will it face a dumping duty? The story does not end with Germany. Trade relations with Canada are in a state of suspense, but Canada, having greeted Britain's departure from the gold standard with dumping duties on British goods, would quite conceivably find the attitude of goodwill toward this country which everyone hopes is embodied in the Honolulu agreement severely strained by a move in the exchange position such as is advocated. The danger of meeting emergency duties when the currency depreciates is always present. New Zealand should know this, having imposed them freely in the past.