TRADE OUTLOOK

New Zealand Herald, Volume LXXV, Issue 23047, 26 May 1938, Page 13

TRADE OUTLOOK

BRITAIN'S POSITION REVIEW BY MINISTER PRICES OF COMMODITIES EFFECT OF RECENT FALLS By Telegraph—Press Association —Copyright (Received May 25, 5.5 p.m.) British Wireless RUGBY, May 24 The President of the Board of Trade, Mr. Oliver Stanley, in the House of Commons to-day reviewed the economic conditions in the past year and made references to the trade negotiations between Britain and America, and the position of the cotton industry. The Minister Raid that 1937, apart from weakness toward the close of the year, had been an extremely prosperous 12 months for British trade. There had been hardly a section of British industry which had not been able to increase its production and profits, and where waces had not tended to rise. In the first four months of 1938, ho wever, there had been a certain slackening in the increase of production. The main reason for this was the fall in commodity prices. This was due in the first place to the war in the Far East, which was having a much greater effect upon commodity prices and world trade than was fully realised. Growing Adverse Balance

The second cause was the influence of the depression in the United States, where the loss of buying power had had a most decisive effect upon commodity prices. In 1937 United States buyers were purchasing from abroad commodities and raw material at a rate of 81,000,000 dollars a month, whereas in the first two months of this year the rate was only 49.000,000 dollars. Mr. Stanley stated that the difficulties of the cotton industry through the fall in prices had increased the importance of the question of reorganising the industry. Dealing with the question of the adverse balance of trade, the Minister said that last year this amounted to £'52,000,000, compared with £18,000,000 in the year before. The £52.000,000 was affected to 6ome extent by a special transaction in silver amounting to about £11,000,000, but lie thought the adverse balance of £52,000,000 was not in itself frightening. Disquieting Figures Quoted It was true that the excess of imports of merchandise rose from £346,000,000 in 1936 to £432,000.000 in 1937, but an analysis of the rise showed that it was not due to a decline in United Kingdom exports, which increased by 9i per cent. It was due almost entirely to a rise in the price of imported commodities.

The figures for the first four months of this year, added Mr. Stanley, were not so encouraging. In spite of the beginning of the fall of commodity prices, the adverse balance had increased, owing partly to an increase in imports, but even more to a decrease in exports. A striking fact was that the whole of the increased adverse balance of trade in the first four months of the year was covered by the increased adverse balance with one country—the United States. Such figures were disquieting, and would have to be taken into account in the negotiations proceeding with the United States. Treaty with America The Minister said he had already told the House on several occasions of the great importance the Government attached to the successful outcome of the trade negotiations between Britain and the United States. "What I mean by a successful outcome is a genuine trade agreement which does provide for fair expansion of trade on the part of both countries, Mr. Stanley continued. "The treaty, when it comes, mii3t be one that can stand on its own legs, be fair to both countries, and lead to the expansion of trade between them." Mr. Stanley also mentioned the negotiations for a trade agreement with India, and announced that preliminary negotiations between a delegation from the Lancashire cotton industry and an unofficial adviser in India had broken down. He could not see how it was possible to conclude a trade agreement with India unless they found a satisfactory settlement of the cotton question. United Kingdom Market In conclusion, Mr. Stanley gave a warning to foreign countries that much as the Government might desire to give them, so far as was compatible with fairness to British manufacturers, access to the great United Kingdom consuming market, tliey could not any longer afford to make unilateral gestures of goodwill in trade matters. They believed in the policy of bilateral trade negotiations, which they had carried on during the year, but to a large extent the amount of access to the. home market given foreign countries depended, not only on the British Government, but on foreign Governments, and how much access to their markets they were willing to give to' British exports.