TRADE AGREEMENTS

Otago Daily Times, Issue 26780, 25 May 1948, Page 4

TRADE AGREEMENTS

Conferences at Geneva And Havana

MR NASH EXPLAINS EFFECTS P.A. WELLINGTON, May 24, In a speech to the Lower Hutt Chamber of Commerce to-night, the Minister of Finance and Customs, Mr Nash, made reference to the general agreement on tariffs and trade drawn up at Geneva over the period April to October, 1947. The agreement, which embodies the schedules of tariff concessions to be accorded (subject to ratification by the respective legislatures) between the nations who participated in the Geneva negotiations and thp text setting out the general commercial policy to be followed by the parties to the agreement will be presented to Parliament for consideration of the question of ratification shortly after the House assembles next month.

Twenty-three nations, including Great Britain and the dominions, signed the final act of the second session of the United Nations Conference on trade and employment at Geneva, where the tariff negotiations were conducted, Mr Nash said. This final act did not bind the signatories, but was merely authentication of the text—in other words, acknowledgment between the signatories that the text of the agreement as finally drawn up was a true representation of the outcome of the negotiations and discussions which led up to it. “ New Zealand is not committed to the agreement, therefore, until it is ratified by Parliament,” he said. “ Subject to the amendments which were made at Havana, the agreement does not come into force until 30 days after the day on which the instruments of acceptance have been deposited with the Secretary-General of the United Nations on behalf of the Governments signatory to the final act, the parties of which account for 85 per cent, of the total external trade of all the signatories to the final' act,” Mr Nash said.

“The final agreement, with schedules, runs into four volumes. Each schedule," the Minister said, “ sets out the tariff items on which cencessions have been negotiated." There were two possible ways in which concessions could be granted at Geneva—by reducing the tariff or margin of preference, or by agreeing to maintain the tariff or preference margin at the existing level. Altogether, Mr Nash went on, the concessions which were negotiated in respect to New Zealand tariffs would affect 267 items, and an even greater number of particular commodities would be affected, for a single tariff item could cover a number of imports. Of these 267 items, 149 were bound at existing rates. There were 100 reductions in tariffs, of which all but four were also reductions in preference margins. Reductions in margins of preference only, without commitment as to rates of duty, affected 18 items. “I should like to stress," said Mr Nash, “ that the British preference system has been maintained and not undermined by the Geneva negotiations. Margins of preference have been reduced, but in all cases due regard has been given to the advisability of such action in relation to the positions of the producers within the Empire, and preferences or reductions in tariffs were only amended On a mutually advantageous basis by the reduction by other countries. In this connection, the countries of the British Commonwealth were in continuous consultation throughout the negotiations. New Zealand’s market in the United Kingdom is not materially affected. There has been no change in existing margins of preference on butter, cheese or preserved milk products. Before the war, meat exports to Britain were given preference in the form of a quota rather than by tariffs. It is, as far as is practicable, the intention to work towards replacement of the quota by a system of tariff preferences. “ On the other hand, the concessions offered by the United States would cover a wide range of our primary products, such as beef and veal, mutton, lamb, butter (in respect of imports from November 1 to March 31 in each year), grass and clover seeds, wool, hides, and flax. In respect to meat and butter products, tariffs would be reduced by 50 per cent, in the United States. Other countries have offered to reduce the tariffs on frozen meats, canned meats, butler, cheese, milk products, apples, and wool. “ These concessions can be valuable to us in the future,” the Minister concluded, “ though, in view of the abnormal post-war conditions necessitating control of trade in many countries of the world, the effect of the new tariff rates will probably not be felt immediately. The general lowering of world tariffs initiated by the general agreement of tariffs and trade, however, will, in company with the provisions of the Havana Charter, Ido a real contribution to the expansion of world trade and the raising of the living standards of the people of the world.”

He went on to describe the protocol of the provisional application signed by eight countries—Australia, Belgium, Canada, France, Luxembourg, the Netherlands, the United Kingdom, and the United States under which the signatories agreed provisionally to apply between themselves as from January 1, 1948, the parts of the agreement which relate to tariffs and general enforcement of the agreement. They had also agreed to carry out the portion relating to general commercial policy to the fullest extent not inconsistent with their existing legislation. The signatories were free to withdraw at any time. As from January 1, 1948, therefore, the tariff concessions accorded by these eight countries at Geneva had been in force among themselves. *■“ During the Havana conference, the representatives of Cuba and Czechoslovakia signified the adherence of their Governments to the protocol of the provisional application up to June 30 next Other countries represented at Geneva have full rights to sign the protocol and apply its provisions. Commercial Policy “The. text relating to commercial policy—for example, customs regulations and procedures, import restrictions and subsidies —has been taken from the Geneva draft charter in the main, with appropriate alterations.” Mr Nash said. “Its purpose is to ensure that the tariff concessions given shall not be frustrated by trade action on the part of any of the contracting parties. The text of the Geneva draft charter, however, was further amended at the Havana international trade conference and there is, therefore, provision in the general agreement on tariffs and trade for the appropriate parts of the text of the agreement to be suspended and superseded by the corresponding provisions of the Havana Charter. Any contracting partv had the right, up to May 23, 1948. to object to the provisions of the agreement' being suspended in this way. “The most important part of the general agreement on tariffs and trade,” said the Minister, “is contained in the (ext and schedules relating to tariffs. Article 1 of the text provides that in the imposition of all Customs duties and in the execution of the regulations in connection with external, trade, each contracting party shall grant to every other contracting party ‘ any advantage, favour, privilege or immunity ’ granted to any other countrv. In other words, subject to available currency, and preferential tariffs, no country shall be favoured by one contracting party against any other contracting party.

“Specific exception to this principle, however, is made in he case of certain preferential systems operating between members of the British Commonwealth and those between France and its dependent territories, the United States and its dependent territories, and other svstems. Article 1 also provides that the margins of Dreference in force on certain dates in particular countries (April 10. 1947 in New Zealand’s case) are not to be increased above the level then existing.”

As individual countries were primarily interested in specific commodities. tariff and preference bargainingat Geneva was carried out bilaterally. Mr Nash said. Again subject to agreed preferences, however, under the most-favoured nation principle slated above, all the contracting parties would be entitled to a tariff or preference concession once it had been given by any one of the contractin'! parties. This meant that each tariff concession would be multilaterally applicable. f The results of the Geneva tariff and preference negotiations were embodied in 20 schedules—one for each of the 18 countries and one each for the Benelux and Syria-Lebanese Customs Unions.