TRADE PROBLEMS

New Zealand Herald, Volume LXXV, Issue 23059, 9 June 1938, Page 13

TRADE PROBLEMS

AUSTRALIAN WOOL THE AMERICAN TARIFF POSSIBILITY OF TREATY DISCUSSIONS WITH BRITAIN By Toicgraph—Press Association —Copyright (Received June 8, 5.16 p.m.) WASHINGTON, June 8 "The wool tariff is the biggest imposition on the American public," the Australian Associated PreßS learns is the opinion privately entertained by the State Department, but—and the but is extremely important —"until America obtains compensating concessions for its agricultural producers from some important industrial country, in this case Britain, with which negotiations for a reciprocal treaty are now considered to be two months behind schedule, the United States will be unable to make concessions to Australia regarding wool." This is possibly the central feature of the possibilities of a trade treaty between Australia and America from the American point of view. The Australian contention, on the other hand, seems to be that any treaty must stand on its own feet. If the United States grants concessions to Australian wool, America will receive compensations, not by sacrifices or concessions in other parts of the British Empire, but such rewards as lie within the wider market for American-manufactured goods in Australia.

Outstanding Difficulties

Australian quarters point to the increasing gravity of the mounting unfavourable balance to Australia in Australian-American trade, and stress the likelihood that unless the United States reduces the tariff on wool she will meet an increasingly higher tariff wall for her goods sent to Australia. There are several outstanding difficulties in the negotiations between Britain and America at the present time. The Australian Associated Press learns authoritatively that the British feel, in the first place, that the dollar is over-valued, giving American foreign trade too great an advantage. This is generally admitted by America which, however, holds that, like debts and maritime matters, currency can have no part in trade treaty negotiations. The State Department brushes aside the idea that the United States is ready further to reduce the gold content of the dollar to assure the continuance of its strong position in foreign trade, but the Associated Press is given to understand that such an eventuality is not altogether impossible, partioularly in event of the intensification of the economic recession.

Interests of Dominions

Britain maintains that she cannot sacrifice the interest of the Dominions in the preferential market for their goods in Britain. The State Department insists that Britain must make greater concessions to the United States, but above all she must modify her concept of "perpetual" concessions to the Dominions, an opportunity for such modification being offered in the proposed revision of the Ottawa agreements. The State bepartment intimates its readiness for a British increase of quotas on certain American goods, but without reducing Empire preferences it is valueless, since without such reductions, United States exporters would be unable to fill the quotas. It can, however, safely be said that the Ottawa agreements, no matter how they will be changed, will probably remain the central principle of Empire trade policy within and without the Empire. Early Agreement Possible

The State Department will not say definitely just when it expects a break in the present deadlock in the AngloAmerican negotiations. It does believe, however, that the "log jam" is likely to break at any moment and a quick agreement may bo reached upon the outstanding points. A treaty between Australia and America is then considered inevitable, but it is not thought likely in the present summer.