CANADA AND COTTON

New Zealand Herald, Volume LXIX, Issue 21252, 4 August 1932, Page 8

CANADA AND COTTON

From some fairly guarded remarks by Mr. R. B. Bennett, Prime Minister of Canada, it is conjectured that better tariff treatment for cotton goods will be part of the offer made to Britain in the negotiations for reciprocal preferences. That it would be highly acceptable needs no demonstration. The difficulties of Lancashire and the need for increased markets as compensation for the losses caused by chaos in China and political developments in India are commonplaces of the industrial situation. The Canadian offer, if it materialises, will be of great interest

from another aspect. It will affect the protection of a Canadian industry. According to the latest available statistics Canada has 80 plants engaged in the manufacture of cotton textiles. The capital involved is between £20,000,000 and £21,000,000. The number of people employed is given as 22,000. Part of this activity is accounted for by the production of fabric for the manufacture of tyres, this being in a sense an offshoot of the motor industry. But cotton yarns and textiles commonly used for apparel and domestic purposes are also produced. Under the tariff the British preferential rate on yarns is approximately 71 per cent. On textiles it varies from 20 to 25 per cent, the margin over the intermediate rate—under which French textiles enter—being from 2i to 5 per cent. If, therefore, the rate on British cotton goods is reduced, it will be a definite instance of protection being decreased. Mr. Bennett's remarks about the efficiency of the Canadian industry are naturally construed as paving the way to such a development. In theoretical discussion of protective systems a point is often made about fostering infant industry under the shelter of duties that can be reduced or abolished as it gains strength. In practice this is not often witnessed. If Canada acts according to Mr. Bennett's hint, it will apply this theory and will also give a significant lead to the reduction of duties on competitive British goods.