TARIFFS AND REPRISALS

New Zealand Herald, Volume LXXI, Issue 21880, 16 August 1934, Page 10

TARIFFS AND REPRISALS

A new influence enters interEmpire trade with the decision of some of the provision merchants of Lancashire not to stock or distribute any Australian produce until tariff changes in connection with cotton are altered in the Commonwealth. At first sight the new cotton duties announced by Mr. Lyons in the Federal Budget last month seem to favour England. An important group of British cotton goods benefit by a 5 per cent reduction in primage duty. The sting for Lancashire evidently lies in the decision to wine out primage entirely upon raw cotton "prescribed by departmental bylaws," irrespective of its origin and to aid the local production of raw cotton,and the manufacture of cotton goods. A bounty has been paid in the past for all locally-produced raw cotton. In future it will be paid only on the requirements of Australian manufacturers plus 20 per cent. The principle underlying this movement is to provide local spinners with raw cotton at the equivalent of world parity prices, and at the same time to ensure a reasonable return to the growers. Although Lancashire is now given a freer market for yarns, the cotton interests of that district foresee a competitive manufacturing industry growing up in Australia. Hence tho protests and the talk of unofficial reprisals by way of boycott. Here if a striking example of the effect of tariff barriers, and other handi caps on trade, within the Empire itself. For merchants to exercise the boycott in such circumstances is of course to be deplored as an extreme step that might «iot be justified by the facts of the case when fully re vealed. Yet the episode indicates the new temper in trade relations, and the kind of reactions which are to be expected in times of stress from any form of interference with the flow of commerce. Reprisals of this sort, when once started, ma.v easily reach serious dimensions, par ticularly in the case of a product competing against foreign goods in which trade has a- large vested interest. In the case of _ butter the Danish interests would naturally do their best to profit out of the boycotting of the Australian article id any centre. The British Government has yet to deliver its opinion upon the Australian cotton tariff. Perhaps it is well that this trouble arose after the announcement of the meat quota scheme. Obviously Australia cannot be wholly condemned for attempting to develop a cotton industry when its meat trade is about to be restricted.