Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, FRIDAY, DEC. 21, 1934. TRADE WITH AUSTRALIA

Poverty Bay Herald, Volume LXI, Issue 18586, 21 December 1934, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, FRIDAY, DEC. 21, 1934. TRADE WITH AUSTRALIA

Tho disappointment, voiced hv the Ministers who visited Australia in an effort to negotiate a new trade agreement, at the failure of their mission, will be shared by the whole com inanity. The Ministers, however, have not seen lit to disclose details of the discussions and tho public, in consequence, must find it ;a little difficult to form a definite opinion as to where the blame really lies. Reticence, per haps, is justified by the fact that the negotiations are to be resumed in (lie new year, but it is desirable, nevertheless, that the peoplo should be alcei; a little further into the con fidence of the Government. The trading position at present is anything but satisfactory to New Zenland, and he time is fast approaching, if it has not: already arrived, wficn firm action will be called for in an attempt to make a more equitable agreement. Hitherto, Australia has had the advantage of the interchange of trade with New Zealand. Last year, her exports to the Dominion were valued at just under £.3,000,000, while her imports from New Zealand amounted to only £1,100,000. For the first ten months of the, current year, New Zealand sold £1,3(50,000 worth of produce to Australia, but her imports’ from the Commonwealth were valued at £2,789,000. Because of tho present trade agreement, or in spite of it, the trade balance is very much in favor of Australia, and it must,, in the nature of things, continue to be so, because the Commonwealth produces a variety of goods which cannot bo grown or economically manufactured in Now Zealand, while there are few things exportable from New Zealand that arc not also available iti Australia. In those circumstances no one is likely to insist that there should be a meticulous balance of trade, but because of the natural advantages reaped bv Australia, the Dominion has every right to demand that its claims should have most favorable consideration. Ifi the past that has not been given, but, on the contrary, New Zealand’s prospects of exploiting the market across the Tasman have been in necessarily and unfairly restricted, ft was reported that the recent negotiations resolved themselves into a battle between New Zealand potatoes and Australian fruit. Both countries have placed embargoes on the imports of these respective commodities, and it might just as well be admitted quite "frankly that these embargoes are merely pawns in the political game. Imports of Australian fruit have been restricted, not solely for the purpose of protecting local growers—since there is invariably n shortage of citrus fruit—while Australians prohibition of- tho importation of

potatoes has no real relationship to disease, as has been alleged, but has been instituted in deference to the demands of local growers who naturally benefit from the high prices obtained as a result of a shortage of supplies. If is possible that these embargoes offset .one another more or less evenly, but New Zealand undoubtedly has the better ground for complaint as the balance of trade is so very much against her. Both countries, however, are losing trade, and any policy that has this effect is not easy to defend. It is fairly clea< that the responsibility lies with .the Federal Government, since New' Zealand did go so far as to relax the restrictions upon imports of. fruit, but this gesture elicited no response from the other side. In such circumstances, New Zealand would be justified in bringing strong pressure to bear, and, fortunately, .she is in a position to do so, because she would.have little to lose and much to gain. Then there is another important aspect of the question. Not only has Australia proved that she is entitled to scant consideration, but she has also directed attention to the point that the Dominion is under an obligation to extend the most favorable possible treatment, to the one country that always proved such a valuable customer—Great Britain. Every extension ‘of one-sided trade with Australia has the effect of reducing our purchases from the United Kingdom, which wo expect to absorb as much of our produce as we care to export. Of the Dominion’s total imports in 1928, 7.78 per cent came from Australia, but by 1932 the percentage had risen to 11.94, and for the first ten months of this year to 12.20. On the other hand, while Australia took 0.05 per cent’ of our total exports in 1928, in 1932 she took only 3.91 per cent, and for the first ten months of J 934 the percentage, had' dropped to 3.28. Ho it is that while Australia is buying loss and less from us, we continue to buy more from-, her at the expense of Britain, to whom we should be giving as much trade as possible. In negotiating with Australia, therefore, New 'ealaud has not only her own interests to consider, but also her relations with the Mother Country. Nor must it be forgotten that the 25 per cent exchange premium which reacts to the detriment of Great Britain confers that much preference upon Australian goods. If Australia persists in her present attitude it may be necessary for New Zealand to take drastic action, either by the Australian method of imposing embargoes, or else by placing on Australian goods a surtax which would have (he effect of nullifying the advantage of the present exchange rate. Incidentally, the failure of two sister Dominions, living almost side by. side and having so much in common, to agree upon their trade relations is a striking example of the difficulty of finding new markets, and particularly, of finding them without penalising the Mother Country,