The Daily News SATURDAY, AUGUST 23, 1930. PREFERENTIAL TARIFFS.

Taranaki Daily News, 23 August 1930, Page 8

The Daily News SATURDAY, AUGUST 23, 1930. PREFERENTIAL TARIFFS.

Much disappointment will be felt over the action of both the Canadian and New Zealand Governments relative to the alteration of the tariff on goods exported by the respective countries and hitherto receiving the benefit of preferential rates. So much has been heard of late in favour of fostering inter-Empire- trade,, as well as of upholding the principle of Imperial unity and reciprocity, that the decision of the Canadian Government, which recently assumed office, to discontinue the preferential duty on New Zealand butter as provided for in the Canada-Australia trade agreement, which was extended to New Zealand on October 1, 1925, came as a shock to the members of the dairying industry of New Zealand. It is certainly unfortunate that the change of the Administration as the result of the recent general elections in our Sister Dominion should be accompanied by’ a reversal of fiscal policy/ but the result demonstrates the slenderness of the actual identical interests that bind the units of the Empire together, and the immense difficulties in the way of practical unity. It will be remembered that when Canada’s neighbour, the United States of America, appreciably enhanced its tariff schedule, there was a great outcry from Canada and much talk of cutting out trade with America and cultivating as thoroughly as possible trade relations with the other units of the British Empire on a preferential basis. There can be no doubt but that had the Liberal Government in Canada remained in power it would have done its best to transfer the export trade of that country to the other Dominions and the Mother Country, but the tariff issue was prominent in the election contest and the agrarian interests were victorious. In his detailed presentation of the facts to the New ’Zealand House of Representatives on Thursday the Prime

Minister, the Hon. G. W.“ Forbes plainly stated the leading factors connected with the position as it affected both Dominions. He mentioned that butter sent from New i Zealand to Canada during 1929 !formed 80 per cent, of New Zealand’s total exports io the Sister i Dominion, and was 20 per cent, iof the total exports of that com- | modify; also that ever since New | Zealand in 1903 adopted a sys|tem of preferential tariffs the ■ benefits of the lower (Julies had 'always been extended to Canadian products. Obviously when the relative circumstances of the two Dominions arc taken into consideration it is only natural that the preponderance of trade should be with Canada, and therefore that Dominion received the greater benefit. That, however, does not affect the real point at issue, which concerns British and Empire preference. . Canada has increased the British preferential tariff rale on butter to a minimum of four cents, but has imposed on butter- and other produce countervailing duties, the effect of which is that if the New Zealand rate on Canadian goods is higher than that in force in Canada on New Zealand goods a higher rate can be charged on New Zealand products if imported into Canada since April last. Efforts have been made to induce the Canadian Government to allow the one cent rate per pound on New Zealand butter to continue until a new trade agreement is made, but the only concession offered was that the existing arrangement should continue till the end of October. Thereupon, though with reluctance to resort to retaliation in the case of a Sister Dominion, the Government of New Zealand decided that Canadian motor vehicles and accessories must be placed on the general tariff in force last April. At the same time the New Zealand Government is willing, pending a direct trade agreement, to replace Canadian motor vehicles on the British preferential tariff rate provided the Canadian Government will 'similarly continue to grant to New Zealand products the rates fixed by the AustraliaCanada agreement. It is an open question whether the more politic course would not have been for Mr. Forbes to have first discussed tho matter with the Canadian authorities when on his way to the Imperial Conference. Even if New Zealand suffered a temporary disadvantage, the moral gain from adopting a conciliatory course would have amply compensated for a postponement of direct retaliation—either actual or threatened. It is to be hoped that Mr. Forbes will put the matter in the right light and completely convince the Canadian Government that New Zealand, above all things, desires to work harmoniously with the other units of the Empire in which the Dominions are co-equal partners.