TRADE CONTROL

New Zealand Herald, Volume LXXIII, Issue 22427, 25 May 1936, Page 14

TRADE CONTROL

AUSTKALIAN PLAN ACTION AGAINST JAPAN POSSIBILITY OF RETALIATION DOMINION MAY BENEFIT "Untyl details of the New Zealand proposals for the control of imports are announced, it is impossible to compare the ideas the Minister of Finance, the Hon. W. Nash, may have for tlio Dominion with those outlined on Saturday by Sir Henry Gullett, Minister in the Federal Government directing Australian trade treaties." said Dr. E. P. Neale, secretary of the Auckland Chamber of Commerce. "Sir Henry has announced, moreover, that the adoption of a licensing system over a limited range of imports was the first step only in a series of contemplated measures."

1 Dr. Neale admitted the possibility that there may have been an interchange of views between tlio ■ Federal and New Zealand Ministers, and that some understanding had been reached between them. While the Australian scheme, in so far as it was not directed at maintaining London balances, was stated to be aimed at diverting a certain amount of goods from countries that were indifferent purchasers of Australian exports, it was difficult to understand until further details were given, he said, why Japan figured so px-o-minently when its trade balanco with Australia favoured the latter country Depleted London Balances

Regarding the extent to which tin* move in Australia was the. result of depleted London balances, Dr. Neale said it would appear there had been a substantial increase in imports to Australia in the last four years accompanied by relatively stable export figures, the position having been partly met by shipments of specie. Australia's total interest obligations on account of Government debts overseas were in the neighbourhood of £21,000,000 in United Kingdom currency. When local body loans, raised abroad, the capital raised by Australian business houses from abroad and dividends by overseas business houses in Australia were considered, the total interest and dividend payments were lifted to £31,000,000. It was clear from the following figures that there had been a tendency to deplete Australian funds in London banks:—

AUSTRALIAN EXTERNAL TRADE Exports of Imports of Year meiclianise merchandiee £ (stg.)- £ (stg.) 1930-31 .. 76,279,000 60,561.000 1931-32 .. 75.184,000 44.05'2,tK)0 . 1932-33 .. 77,771,000 56,843.000 1933-34 .. 89,957.000 59,435,000 1934-35 .. 81,860,000 72,421,000 Nine mths. 1935-36 .. 78,196,000 63,645,000 EXCESS OP EXPORTS OVER IMPORTS Total including Merchandise specie <fc bullion £ (stg.) • £ (stg.) 1930-31 .. 15.718.000 28.366,000 1931-32 .. 31,142,000 40,636,000, 1932-33 .. 20,928.000 38.583.000 1933-34 .. 30,522.000 37,860,000 1934-35 ~ 9,439,000 16,106,000 Nine mths, . 1935-36 .. 14,551,000 21,312.000 Interest on all loans plus dividend payments due in Londpn, £31,000,000 annually. Exports to Japan Besides the difficulty created by the depletion of London funds an attempt was being made to deal with the problem of imports from Japan. Nunjerous representations to the authorities at Canberra both by Australian manufacturers and representatives in Australia of British manufacturers had been made on the subject. Indeed, the Minister expressly stated there had been a failure in trade negotiations with Japan. One could well understand overtures to Japan failing, because Australian exports to Japan were more than double Australian imports from Japan. In the circumstances Japan could hardly be willing to accept with alacrity the idea that the Japanese unfavourable trade balance with Australia should be further increased. For the year ended June 30, 1935, the Australian exports to Japan in Australian currency were valued at £12,096,000, while Australian imports from Japan were £5,781,000. In view of the steps being taken in Australia, and their possible relation to New Zealand; the main items of trade between Australia and Japan were of interest. The value of Australian exports to Japan was: Wool. £8.680,000; wheat, £2,274,000; tallow, £174,000; dried milk and cream, £43,000; beef, £28.000, The main imports to Australia from Japan in the period were: Silk piece goods, £2,312,000; cotton and linen piece goods, £872,000; raw silk, £246,000; jewellery and fancy 'goods, £223,000; crockery, £202,000; metal manufactures, £226,000; yarns, £84,000; sulphur, £90,000; towels. £42,000; paper manufactures, £66,000; glassware, £51.000; fish. £55.000; tea, £45,000; and buttons, £40,000. , Big Rise in Exports

Dr. Neale said that what increased surprise that Australia should have made overtures to Japan was that Australian exports to Japan for the nine-monthly period from July, 1935, to March, 1936, had still further increased, as the following figures showed Nine months Nine months 1931-35 1935-30 £ (Aust.) £ (Aust.) Beef .. .. rr,146 22,532 Wheat .. .. 1,950,372 1,642,747 Greasy wool .. 5.741.303 12,324,836 Scoured wool .. 43,629 100,031 The fact that Australia made the overtures referred to showed the extent to which protests against importations from Japan became vocal by the interests affected. It was certainly true that on silks and other piece goods in so far as ad valorem duties applied the lower price for Japanese meant the rate of duty a yard was much higher for British than for Japanese and to meet the situation the switching of the duty from ad valorem to a specific basis was not unfair. But to pro to the extent of prohibiting entirely, except with the consent, goods from non-Empire countries gave Great Britain more than it had asked for at Ottawa, and was unduly provocative to Japan and the other countries concerned. Dr. Neale said he would not bo surprised to see the Japanese adopt retaliatory measures against Australia and in so far" as these applied to wool New Zealand might benefit, though it was true the quality of Australian and New Zealand wools was not identical and it might be therefore that the effect of any such discrimination by Japan against Australia would benefit other wool-producing countries than New Zealand.