DIRECTION OF TRADE

New Zealand Herald, Volume LXXIII, Issue 22346, 18 February 1936, Page 7

DIRECTION OF TRADE

TRENDS SINCE OTTAWA LARGE SALES TO BRITAIN FAVOURABLE BALANCE RISES CANADA AND AUSTRALIA

For every £1 worth of goods sold by New Zealand last year to the "Onited Kingdom, the Dominion purchased 9s 6d worth of goods in return; for every £1 worth sold to Canada, 74s 3d worth was purchased; and for every £1 worth sold to Australia, 48s 3d was spent in the Commonwealth. These are significant facts arising from a study of the trend of New Zealand's overseas trado in 1935.

New Zealand's favourable balance of trade last year was £10,251,000, compared with £16,062,000 in 1934, the decline being due to lower exports of wool and to a somewhat advanced rate of importing. With British countries, the. favourable balance declined from £17,882,000 to £14,668,000, and an unfavourable balance with foreign countries was increased from £1,820,000 to £4,417,000. The direction of New Zealand's overseas trade in the past year is shown in the following table, the figures being in thousands of pounds New Zealand currency (exports include re-exports and imports are according to the country of shipment): — Exports Imports Balance £OOO £OOO £OOO (N.Z.) (N.Z.) (N.Z.) United Kingdom 58.922 18,519 +20.403 Canada - . . 657 2,439 —1,782 Australia .. 1,782 4,295 -2,013 Total British 41.779 27,111 +14,068 Belgium .. .. 647 205 +442 France . . . . 485 181 +304 Germany . . 105 470 -305 Dutch E. Indies 2 1,433 —1,'431 Japan . . . . 432 1,079 7™? United States .. 2.468 4,362 -1.894 Total foreign 4.760 9,177 -4,417 All countries 4(3,539 36,288 +10,25f Trade Within Empire A closer analysis of New Zealand's trade with tho principal British countries shows the following: EXPORTS (/000 N.Z.) 1932 1933 1934 1935 U.K 31,345 35,276 38,629 38.922 Canada . • 241 501 698 657 Aust 1.445 1.393 1,883 1,782 IMPORTS (£OOO N.Z.) 1932 1933 1934 1935 TT K .. 12,906 13,499 16,155 18,519 Canada" 1.093 1,258 2,088 2,439 Aust 2,571 2,808 3,532 4,290 BALANCE OF TRADE (£OOO N.Z.) 1932 1933 1934 1935 U.K. .. +18,439 +21,777 +22.47G +20,403 Canada —854 —697 —1,390 —1,782 Aust. .. -1,126 -1,415 -1,649 - 2.513 What have been the fruits of the Ottawa agreement in 1932? Imports from Britain have increased by £5,500,000, but exports have expanded bv £7,500,000, thus increasing the favourable balance by £2,000,000. Per- | centage calculations show that exports to Britain have increased by only 20 per cent since 1932, while imports have advanced by 40 per cent, but percentages do not express the picture in its true perspective. The fact is that New Zealand has made no progress in adjusting the balance of trade to Britain's advantage. The Foreign Balancea

At the same time, Canada and Australia hare been reaping a benefit at New Zealand's expense, and possibly at the expense of the Dominion's trade relations with Britain. Imports from both countries have increased more rapidly than have exports to those countries and the balance of trade has swung further against New Zealand. The Ottawa agreement has resulted in an increase in total purchases from British countries. In 1932, imports from British countries were £19,000,000 and from foreign countries £7,000.000. In 1935, the totals respectively were £27,000.000 and £9,000,000. As far as the balances with foreign countries are concerned, the movements for the year are not very significant, as a normal rate "of wool exporting is likely to correct some of the unfavourable trends. The huge adverse balance with the Dutch East Indies is not unusual, as thp bulk of New Zealand's sugar imports are received from that country, comparatively little coming from " Fiji* The adverse balance of £1,894,000 with the United States compares with £2,297,000 in 1934, £1,594,000 in 1933 and £2,691,000 in 1932. Exports to the United States increased last year by over £1,000,000, while imports were about £BOO,OOO higher. However, it is questionable whether the export trade to the United States will continue to grow.