TRADE WITH GERMANY

Otago Daily Times, Issue 25514, 19 April 1944, Page 4

TRADE WITH GERMANY

Allied bombing policy, in relation to the destruction of German production at its sources in Europe, has lent a new urgency to the efforts of the Nazis to keep open their supply channels with neutral countries. Only a fortnight ago the United States Foreign Economic Administrator, Mr Leo Crowley, made the statement that the German • war machine, because of inferior equipment, had started on the down grade. Generally speaking, he said, German tanks and planes were still rugged, with their vital parts in good condition, but the less essential parts were cheap, and some substitute material had been found in captured vehicles. The Germans were also, he said, using less artillery and fewer grenades; than hitherto. These facts help to fill in the background of the present Allied campaign to persuade neutrals, particularly Sweden and Turkey, to limit their trade with the Nazis and thus hasten the collapse of Hitlerism, and the prompt decision of the Turkish Government to suspend the export of chrome to Germany is a very gratifying development. Some of the neutrals, as the Manchester Guardian has pointed out, have taken action in recent months to restore a balance-of concession more favourable to the Allied cause and their own eventual freedom to trade whei’e they will. Sweden’s case is, of course, singular, to the extent that her war-time trade relations are based very largely on trade with Germany. Before the war Germany supplied roughly one-fifth of Sweden’s imports, and one-sixth of Sweden’s exports went to Germany. In the first quarter of last year,

however, more than half of Sweden’s imports originated in Germany, while a little more than a third of her export trade was with the Reich. Germany, well knowing the importance of the Swedish sources of supply, especially of iron ore and steel bearings, has made every effort to keep up her own deliveries of coal and coke, steel, potash, and sodium. In return, she has been able to receive from Sweden practically the whole of her exports of iron ore, most of which are shipped from Lulea, the northern port in the Gulf of Bothnia, and are thus subject in the meantime to little risk of Allied interference. For Sweden, after the collapse of France, the maintenance of trade relations with the Reich became essential. Her exports, amounting normally to a third of her industrial production, were cut off from overseas markets, and she was compelled to turn to Germany for the coal and steel without which her industries would be brought to a standstill. The Allies have always taken a sympathetic view of Sweden’s peculiar difficulties, and even now would be reluctant to bring any pressure to bear on her which might add to them. But the case of Turkey, as the British newspapers have been emphasising of late, presented very different features. Her deliveries of chrome to Germany had tended to increase rather than diminish. Turkey signed an agreement with Germany in 1941 under which she contracted to deliver 45,000 tons in 1943 and 135,000 tons this year. The 1943 quota was not filled, but Turkey later undertook to make up the shortage in her 1944 deliveries —this in spite of the fact that a' ready market for all her chrome exists in Britain. This arrangement would, indeed, apply not merely to Turkish chrome, but to the excess production in many commodities of Spain and Portugal as well, since Allied command of the South Atlantic and the Mediterranean would make trade with the Mediterranean countries entirely practicable. By opening the Azores for use by the Allies, Portugal made a gesture which was greatly appreciated, and it might be expected that she would see at this stage that the further step of abandonment of her trade with Germany would be to her ultimate advantage. Spain has, for her part, .made no secret of her political and economic affiliations with Hitler’s Germany, and will assuredly have cause to regret that intimacy when Germany goes down in defeat.