Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, TUESDAY, NOV. 19, 1935. EXPANSION OF MARKETS

Poverty Bay Herald, Volume LXII, Issue 18867, 19 November 1935, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, TUESDAY, NOV. 19, 1935. EXPANSION OF MARKETS

The effects of the Ottawa agreements, the possibility of developing new markets for the Dominions' pro ducc, and suggested reciprocal trade

treaties in connection with a scheme of guaranted prices for farmers, arc topics which have featured prom inently in the present election cam paign, but generally speaking caudi dates have contented themselves with 'no bald advocacy of certain policies and have made no attempt to discust details. The truth of the position it that New Zealand, whether we like it or not, i.s not able to dictate terms but virtually has to accept whatevoi trade is offered her. This fact may bo unpalatable, but nothing is to be gained by ignoring it, and means of improving trade conditions will not be discovered by railing against the existing system, but only by attempting to take the fullest possible advantage of it. New Zealand's economic existence depends almost entirely, not only on production from .the land, but also on the export of that produce, only 2 per cent of our wool, S to 40 per cent of our meat, 10 per cent of butter, and 4 per cent of cheese being consumed on the domestic market. It is true lhat each id' these commodities is in general demand, but they

are also in more or less general :-upply, the tendency of all countries since the war to become more selfsufficient and to devote greater at I enlion to agriculture having both reduced markets and increased supplies. Prior to the Ottawa Conference the situation had become acute, hut, fortunately for the Dominion, the agreements 11ien entered into assured Em-

pire countries of an expanding share of the Empire markets and varying measures of preference over their foreign competitors. In almost

everything that vrc produce wo

have to compete -with" other, countries, and, with few exception.", our rivals are closer to the markets and their costs generally arc; on a lower scale. These factors maKc the exploitation of new markets or the negotiation of new agreements extremely difficult-, and we are Forced hack to the position (hat New Zealand must remain very largely dependent upon the British market. That this is the case i.s clearly shown ny the trade returns for the first nine months of the present year. Of exports totalling less than £30,000,000, all except. £6,000,000 worth went to the United Kingdom and less than £4,000,000 worth to foreign countries, and the present prospects for any beneficial change in the position are not encouraging. The greatest hope of an improvement in the situation lie? in an increase in prices on the British market, and this is governed, not only hy the supplies available from other sources, but also by any increase in the world demand which, while it might not affect New Zealand directly, would indirectly improve the pwition of its produce at Home. The search for new markets and reciprocal trade are bound up with one another, for if we expect other countries to absorb more of our produce I hey will undoubtedly expect us to buy more from them, and the more we buy from foreign sources the greater will he the lack of balance in our trade with Great Britain, the one customer upon whom we primarily rely. .For the nine-month period of (his year our exports to Britain were valued at nearly £30.000,000, but our imports from the same source wore worth only £13,f)00,000 leaving a balance in favor of New Zealand of £16,250,000.' If, in the search for now markets, we import more from foreign countries it is inevitable that the /Motherland must he still further unfairly penalised in her trade relations with New Zealand. In any case, where are we to look for new markets? It is true that our foreign exports for the nine months were valued at less than £4,000,000 while our imports totalled £0.1)00,000, leaving an adverse balance of £2,f)00,000, but the rectification of this position would only provide outlets for a very small proportion of our total exports and eertainly would not promote any remarkable trade revival. Another question is what foreign countries are in a position to buy more of our produce. .More than half the adver.se balance' is accounted for hy Asiatic, countries, a situation that, is explained by the fact that their low living standards enable us lo buy imports cheaply but al the same time preclude them from purchasing our exports at profitable prices. What prospect is there, for instance, of a reciprocal agreement with Japan, where the great proportion of the people do noi earn siifiieienl lo he able to eat butter or meat, but because they are so poorly paid are able to supply us with imports at prices which make them attractive? A reciprocal agreement with Great Britain, our chief customer, would not be advantageous to New Zealand, since the only possible effect of it would be to compel us to import more. goods instead of manufacturing, them ourselves, and this, incidentally, emphasises one of tlu l most serious drawbacks to any scheme of guaranteed prices based on reciprocal agree meats. Without using excessive pro toetivc tariffs, the Dominion has'built up substantial secondary industries and any system of accepting imports in payment for exports, especially if the latter arc valued on an artificially high basis, would spell ruin for many manufacturers in our own country. The whole question of international trade is so complicated by a variety of factors that it is clear that any scheme for effecting drastic alterations would have serious repercussions and might do infinitely more harm than good. So far as New Zealand is concerned, new markets, if they can be secured at all, can only be obtained at the expense of Great Britain, and this is the one thing which, above all else, should be avoided. Already the world is slowly emerging from the crisis caused by the wave of economic, nationalism, find this Dominion will have more to gain by maintaining her loyalty to the Mother Country and patiently awaiting a general readjustment than by attempting to effect a revolution on her own.