THE OTAGO DAILY TIMES TUESDAY, December 20, 1938. TRADE WITH GREAT BRITAIN

Otago Daily Times, Issue 23687, 20 December 1938, Page 10

THE OTAGO DAILY TIMES TUESDAY, December 20, 1938. TRADE WITH GREAT BRITAIN

The Prime Minister and the Minister of Customs, and the High Commissioner after those two, have been earnestly explaining to their respective publics that virtually the first purpose of the import control restrictions is to promote a greater measure of reciprocity in trade between the United Kingdom and New Zealand. Replying to apprehensive English comment on the probable effect of control by licensing on British export trade to this country, the Prime Minister has declared that the desire of the Government is to increase the volume of New Zealand purchases of United Kingdom goods. He has repeated, also, what he frequently said in trade discussions during his visit to Great Britain two years ago, that New Zealand is prepared to spend on British goods every pound received from Great Britain from the sale in that market of New Zealand products. And, Mr Savage adds, " we cannot do more than that." Unfortunately experience suggests what Mr Savage appears to overlook, namely, that it may be difficult for us to do as much as that. A glance at the trade figures since 1935 should serve to put the position in its true perspective. In 1935 our exports to the United Kingdom were valued at £38,921,568, while our imports from the United Kingdom were worth £18,519,602, or a shade less than half of the export total. In 1936 the values were —exports £45,492,989, imports £22,078,959; in 1937 they were—exports £50,705,591, imports £28,184,891; and for the first ten months of the present year, while the exports were valued at £42,182,116, the imports were only £22,246,935. It will be observed that the Dominion's absorptive capacity in respect of British goods has stood, in the cast four years, at

about half the value of our exports to the United Kingdom. The figures for invisible imports would reduce the margin against Great Britain to some extent, but even if liberal allowance is made for that factor it must appear that the surplus of our exports over imports since 1935 has been very considerable. Even if, as must be assumed, the process of licensing will be so directed as to give preference to United Kingdom goods over those from foreign countries, it does not seem possible that the system will operate so as not to penalise the British exporter to some extent. It is the aim of the Government to build up the Dominion's manufacturing industries and, by the curtailment of imports, to conserve this country's external credit resources. But if the New Zealand manufacturer's market is to be extended it is obvious that a wider range of goods, including many classes now imported, will have to be produced locally. Articles of men's and women's apparel present themselves as an illustration of one direction in which control may react to the disadvantage of the British manufacturer; for, if the New Zealander is to act on the Government's insistence that he shall use local products he will have to abandon any preference he may have for imported clothing. And that decision is not likely to be regarded in the United Kingdom as demonstrating a desire for greater reciprocity in trade. It may be, as Mr Savage claims, that the use that is to be made of the policy will decide whether it is good or bad in form. One immediate difficulty, which is making for very serious business disturbance, is that no person—not even, apparently, the Minister of Customs —knows exactly what use is to be made of it. The Auckland Chamber of Commerce, for example, has just taken occasion to remind the Minister that while it appreciates his assurance that every effort is being made to expedite the issue of importers' licences, there is as yet no knowledge of the classes of goods of which importation is to be restricted or of the extent to which restriction will be enforced, or of the countries that will be affected. In such circumstances importers are necessarily suffering the gravest embarrassments, while the feelings of intending shippers in other countries can perhaps better be imagined than described. The Government cannot hope, to escape criticism while its plan for exchange control bears more the appearance of hasty improvisation than of careful design. It is doubtless very much in earnest in its wish to improve the basis of Anglo-New Zealand trade and to preserve the principle of reciprocity in a market whose continued goodwill is of vital importance to our own well-being. For that reason, indeed, the operation of control will be watched with an interest not entirely divorced from anxiety.