QUOTA ARGUMENT

New Zealand Herald, Volume LXXI, Issue 21769, 7 April 1934, Page 13

QUOTA ARGUMENT

ATTITUDE OF BRITAIN

CONFERENCE NOT WANTED NEED FOR NEW AGREEMENT "The dairy farmers of New Zealand, and of the Auckland Province in particular, will bo exceedingly relieved to know the British Government definitely does not want an Empire conference to discuss the question of a quota restricting imports of dairy produce during the period of the Ottawa Agreement," said Mr. W. Goodfellow, managing director of Amalgamated Dairies, Limited, yesterday. Mr. Goodfellow said the "recent panic policy of our political leaders" was to be deplored. In justice to the Prime Minister, Mr. Forbes, it should be mentioned that he obviously never was keen on the restriction of the Dominion's exports. On the other hand, Mr. Coates for some time past had been obsessed with the necessity for planning everything, and the dairy industry at present seemed to bo his particular hobby. Mr. Masters, on the other hand, could be relied 011 to advocate whatever best suited the secondary industries. "It is questionable whether either of these gentlemen has ever given the question of the restriction of dairy produce exports any sierious thought," said Mr. Goodfellow. "They talked in an off-hand way about finding new markets, but failed to indicate where these were to bo located. Only 16 per cent of the butter and 4£ per cent of the cheese produced in New Zealand is consumed here. Therefore, the local market is not of much value* to the industry, and cannot be further developed." Manufacturers' Attitude Mr. Goodfellow considered the recent quota talk was more or less supported by the local -manufacturers, mainly in the South Island, in the hope that restricted exports of: dairy produce would cancel out the Ottawa Agreement and result in the maintenance of the high tariff policy. According to Mr. Goodfellow, the quota issue was first raised in New Zealand in a booklet by Mr. Coates in May, 1933, entitled "A Butter Quota or a Free Market?" Mr. Goodfellow said the booklet might best be described as a "Yes-No" statement, but was in favour of a quota, It evidently gave the British Minister of Agriculture the impression that New Zealand farmers favoured Mr. Coates' ideas.

After citing subsequent developments —the discussions held by Mr. Forbes and Mr. Masters in London find the visit of Mr. Baxter to New Zealand— Mr. Goodfellow referred to the Dominion dairy conference in Wellington 011 March 13 and 14 last. "Acting under Ministerial advice," he said, "the conference agreed to send a delegation to Great Britain, but the personnel and nature of the delegation were referred to the Dairy Board with instructions to confer with» the Government. Board and Government

"Finally, the Dairy Board met the Government in conference 011 March 22 and 23, when, contrary to the board's declared policy, and, one can only assume, under extreme political pressure, the board finally agreed to a delegation being sent to London, headed by a Minister, and wii;h power to act. This meant that the Dairy Board had placed the industry in the hands of a member of the Government, with power to enter into an agreement, to restrict exports of dairy produce from New Zealand. The board was requested to meet the Government again 011 April 11 to present and discuss a restriction scheme to form the basis for discussions at an Empire conference, in London.

"Latest reportn received from Wellington a few days since," added Mr. Goodfellow, "stated that the British Government, however, has again intimated that it does not desire a conference."

The hope that some sound, constructive plan would now be evolved for the permanent relief of the industry was expressed by Mr. Goodfellow. "In the first place," he said, "I would point out once again that the Ottawa Agreement expires in less than one and a-half years, and that a new agreement will have to be negotiated prior to that date, which, in my opinion, will in all probability' be based on results."

Politicians, and those interested in the maintenance of the tariff, were continually stating that the British Government would not make a separate agreement with New Zealand. But it was difficult to find any justification for such a statement. What had occurred in the past need not necessarily be the policy in future. Britain had changed her trade policy, and now had a tariff as a bargaining counter and New Zealand for the first time had a trading agreement. Well-informed commercial opinion in London favoured the imposition of a preferential tariff rather than a quota.

Action .Since Ottawa It was quite conceivable that the British import tariff would be based on the results of the operation of the existing Ottawa Agreement. If that proved to be the case, New Zealand would not make a satisfactory showing, when compared with other Empire countries; thus the urgent necessity for a reduction in both the tariff and exchange. Unquestionably, the Ottawa Agreement was intended to give the British manufacturer improved trade facilities in New Zealand. In reality the small tariff concession granted had been more than neutralised by the exchange increase, with tho result that the British manufacturer was now worse off than before t lie agreement was signed. Thus, there was a growing dissatisfaction in tho United Kingdom with New Zealand —a development which was most unfortunate from every point of view, and one which must cause the New Zealand Government considerable concern. "The failure of New Zealand to reduce tariffs, at least to minimise the exchange increase, the diversion of a substantial business in consequence from England to Australia, and the renewal of a onesided agreement with Canada to enable American-owned Canadian plants to obtain Empire preference, are some of I,he things that cause one to say that New Zealand has, since Ottawa, shown an almost callous disregard for her only worthwhile customer," concluded Mr. Goodfellow. "There is yet time, but not very much time, to put matters right. New Zealand's obligations under the Ottawa Agreement, which was her first trade agreement with the United Kingdom, should be carried out in a generous spirit, and be worthy of her past reputation."