Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, MAY 25, 1936. OVERSEAS TRADE

Poverty Bay Herald, Volume LXIII, Issue 19023, 25 May 1936, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, MAY 25, 1936. OVERSEAS TRADE

Some further aspects of the Govern mcnt's marketing policy were emphasised last week when a deputation representing British trading interests waited on members of the Cabinet with the, object of drawing attention to the-difficulties created by the prosent uncertainty in regard to trade. The Prime Minister, in, the course of his reply, stated that trade with Groat Britain must be extended, Mr. Sullivan referred to the importance of New Zealand developing her own secondary industries, and Mr.-Nash based his policy on the principle of reciprocal trade, preferably with the Mother Country. It is somewhat difficult to reconcile those .statements, for, on the face of it, the policy,of one Minister, jfooms to negative that of another. Mr. Nash, to whom lias booh entrusted the responsibility of negotiating trade agreements, lays down the dictum: "Wo are going to ensure that to the extent that Great Britain takes goods from uh we will take goods from Britain. . . . There will be no credit for gthor people unless they take goods from us." That is plain enough as fai as it goes, but it does not go nearly far enough. The chief object, of the Government is to increase the markets for Dominion produce, and the suggestion is that by promising to import, goods in return if will be possible to obtain additional outlets for our exports. The fact is, however, that New Zealand has always been able to dispo.se of her produce, and the difficulties that have arisen in the past have been due to the low value of world prices. Mr. Nash may not experience any difficulty in arranging for the disposal of our butter, for instance, but it is extremely improbable that he will be able to obtain any guarantee that the price will be a payable one to the producer. On the contrary, the lower the price of butter, the greater will be the consumption, and, incidentally, the greater the loss to the New Zealand Government which has undertaken to purchase it front the farmers at a fixed price. It is true that New Zealand, under the new arrangement, will be faking goods in exchange for butter, but the quantity of goods which will be taken must be determined by prices. Price, therefore, must continue to dominate the economic position" of the Dominion, and it has not been suggested that anything can be done to affect them one way or another. Mr. Nash's statement would seem to infer that he is in a strong position to bargain with Great Britain, but the reasoning is difficult to follow. Ho offers, in effect, that ,if Britain will take goods from tis, we will take goods in return from Britain. The position to-day is that Britain' does take our produce, but we do not take from her an equivalent quantity of goods. Last year, for example, New. Zealand expi'fs to the Mother Country were valued at nearly £40,000,000, but our imports from Great Britain were worth only £18,000,000, leaving a surplus in favour of New Zealand of more than £20,000,000. Tf half of this is allocated to the servicing of the,overseas debt, the Dominion would slid require to spend another £10,000,000; in Britain to even approximately balance tho trado between the two countries.

The problem, (hen, if Mr. Nash's principle is adhered to,-.is not to sell more to Britain, but to buy more from her. Suppose .the Mother Country were to adopt Mr. Nash's own. dictum—" there will be no credit for other people unless they take goods from' us"—it would mean that New Zealand's oxports would need to be reduced by about £10,000,000 per annum, or more than 2il per cent. Alternatively, the Dominion must increase its imports of British goods by £10,000,000, or more than f>o per cent. Clearly, the Dominion possesses no weapon, with which to lay down the law to the Mother Country. Then there is the other side of the question. New Zealand desires to develop her secondary industries in order to provide more work for her own people. Mr. Nash says "New Zealand's first aim is to extend its manufactures to give a balanced economy," but can it extend its manufactures except at the expense of British industries? Yet Mr. Savage says everyone will agree that trade with the United Kingdom must be extended. Does he mean two-way trade, or is he thinking only of exports? If the former, then the first step is to buy more from Britain, and, presumably, manufacture' less ourselves, and'if he is referring only to export trade, he is confronted with the fact that Great Britain, too, is determined only to buy from those who buy from her. The more tho question is considered the more complex does it become, and, in the case of New Zealand the. complications are immeasurably increased by the Government's policy of controlling exports, which must inevitably lend to the control of imports also. At the present time no direct solution presents itself—it must, in fact, largely depend upon a general recovery of world trade—but it is difficult to escape the conclusion that the best results will be derived, not from creating further barriers to international trade, but by taking every possible step to remove them.