THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, JUNE 5, 1933 JAPAN'S EXPORT TRADE

New Zealand Herald, Volume LXX, Issue 21509, 5 June 1933, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, JUNE 5, 1933 JAPAN'S EXPORT TRADE

At the World Economic Conference Japan will occupy an unusual position among the great manufacturing countries, for its place in international trade is governed by several factors not fully applicable to Europe and America. The statement made in the House of Commons by the Parliamentary Secretary to the Overseas Trade Department upon the eve of the adjournment has special significance. Had Colonel Colville so wished, he could have dismissed his reply to the question on Japanese trade competition in a few words. Instead he covered a wide field and said enough to indicate the complexity of the problem, as well as to reveal the anxiety of Britain to arrive at an understanding •with Japan as to the allocation of markets in which her competition can hardly be regarded as equitable from the British point of view. The factor of exchange which now enables Japan to sell at almost cost price is one which will come before the Economic Conference as a matter of course. Not so readily open for general discussion, however, will be that of cheap labour costs in Japan, combined with the extra advantage her industrial interests derive from shipping subsidies. Yet, as Colonel Colville remarked, allowance must also be made for Japan's organisation and efficiency. A recent official report by two Englishmen, upon economic conditions in Japan, admitted that the success of Japan's export industries is attributable less to the assistance derived from the depreciation of the yen and State subsidies than to efficiency and organisation.

Nevertheless, the question of cheap labour cannot be suppi-essed in a general review of industry on the ground that it is a domestic circumstance of long standing which carries its penalties in the home market to counterbalance advantages abroad. It is perhaps surprising that India, also a country where labour costs are low by comparison with those of European countries and America, was the first to take action to prevent Japanese dumping. The Indo-Japanese Trade Convention came into operation in 1904. Some twelve years ago a policy of discriminating protection was adopted, but even then the commission which made the recommendations refrained from urging the adoption of a measure against dumping that would have general and immediate effect. It merely suggested legislation whereby power should be taken to impose a dumping duty when, after inquiry by the Tariff Board, it had been established that dumping was taking place and that it was injuring or likely to injure an Indian industry. Only now has this suggestion been acted upon. It is, of course, a measure of general application, but it is clearly intended to meet, in particular, Japanese dumping. No action can be taken under it, however, until October, when the six months' notice to terminate the most - favoured - nation treatment which Japan has so long enjoyed will expire. What then will transpire is a matter for conjecture. In the meantime, an agreement may be reached upon a wider basis than that merely of India and Japan. Already India has taken some pro-tective-measures through the tariff.' In August last the duty on nonBritish cotton piece-goods was raised from 31J to 50 per* cent, the main purpose being to meet the Japanese competition with Indian mills as stimulated by the fall in the exchange value of the yen. This increased protection has not, however, been sufficient to satisfy the Indian cotton industry, nor, probably, that of Lancashire. According to the Review of the Trade of India for 1931-32 many trades are affected by Japanese shipments of cheap goods. The larger trades are in cotton piece-goods and yarn, rayon and silk manufactures, but there is a considerable aggregate trade also in apparel, boots and shoes, brass and bronze ware, brushes and brooms, drugs and medicines, earthenware and porcelain, glass and glassware, furniture and cabinetware, paper and pasteboard, haberdashery and millinery and even woollen goods which, before the war, were largely obtained from the United Kingdom. Last year Japan's shipments of textiles to India represented 30 per cent of her total sales abroad, and those of yarn no less than 60 per cent. In consequence of the action of the Indian Government to restrict this vast flood of manufactured goods that can still be sold at prices undercutting the produce of Indian factories there was a hint that Japan might retaliate by boycotting Indian raw cotton; but this has not been taken sei'iously by the cotton trade of Western- India, which affirms that Japan must buy in the cheapest market. Colonel Colville explained in his statement some of the difficulties which have arisen in the West African trade through the rapid expansion of Japanese competition. There are many other aspects of the problem which are not merely the concern of the United Kingdom. The Dominions and Colonies are involved, and one of quite an extraordinary character has been exercising the mind of Canadian manufacturers. There has been an importation into Canada upon quite a large scale of rubber-soled footwear from Japanese factories located in Singapore, where they have the benefit of Empire preference. The difficulty for the Canadian Government and, indeed, the Governments of other Dominions, is to decide how far they can go to deal with a trade of this kind. The whole question will probably come down to what percentage of Malay labour and material is put into the footwear." This perhaps carries the problem farther than necessary, but it serves to illustrate the growing .power of Japanese industry.