RELATIONS WITH CANADA

Taranaki Daily News, 15 August 1931, Page 13

RELATIONS WITH CANADA

DELAY IN NEGOTIATIONS PRIME MINISTERS’ TELEGRAMS. SOME RECENT COMMUNICATIONS. The nature of the recent negotiations between Canada and New Zealand in relation to trade questions is indicated by telegrams which have passed between the Prime Ministers, of the two Dominions. The Rt. Hon. G. W. Forbes has now released certain of these messages for publication. The first of these is a message sent by Mr. Forbes on June 9 with reference to a Canadian telegram of May 29. In it Mr. Forbes stated that he regretted very much that the New Zealand Government could not defer longer the action indicated in his telegram of May 20. The Prime Minister of Canada having mentioned “the endeavours of the Canadian Government to come to a satisfactory agreement,” Mr. Forbes remarked that , any such efforts had not been apparent to the New Zealand.. Government, which retained the impression that .the Canadian Government, having in effect prohibited the importation of butter from New Zealand, had been in no haste to enter into definite negotiations. Two occasions on which New .Zealand was prepared for these conversations, namely, at Ottawa and at London, had been allowed to pass without any attempt on the part of the Canadian Government to give detailed and effective consideration to the matter. “I note with pleasure,” Mr. Forbes stated, “the indication which may, I think, be inferred from the second paragraph of your telegram that the Canadian Government do not now regard themselves as precluded from making a concession on New Zealand butter. Neither at Ottawa nor at London, nor, indeed, at any time subsequently, was I given any definite indication that such a concession could be made, and though my telegram of March 18 last specifically notified the, Canadian Government that the action now taken could be postponed only if the Canadian Government found such a concession to be possible, your reply of May 14 gave no indication of anything beyond a ‘continuance’ of preference. The New Zealand Government will, of course, .be happy to learn whenever the Canadian Government consider the timo appropriate what concessions they propose to make.”

‘BUTTER NOT RUSHED TO CANADA.’

The Government in New Zealand could not agree that “an abnormal trade situation” was created by the importations of New Zealand butter into Canada in-1929-1930, or that “the butter was being rushed into Canada to take advantage of the prevailing low rate of one cent.” The figures for that year indicated merely the progressive annual increase since New Zealand butter was placed upon an equal footing with Australian butter in 1925. Even, however, if the situation could be regarded as abnormal the Canadian Government would, no doubt, have noted that the importations in no way amounted to dumping, and that notwithstanding the importations of New Zealand butter in 19291930 Canada still enjoyed a balance of trade over New Zealand. . The Government in New Zealand retained its belief that the imposition of a prohibitive tariff duty on New Zealand butter, which was not imposed generally on all butter importations, and which had the effect of terminating the importation of New Zealand butter while stimulating the importation of butter from another source, might rightly be regarded as a penal measure, “it may well be that Canada, as you state, is to-day granting to New Zealand its British preferential rate on all products. Where, however, the British preferential rate is not the lowest rate and is in itself prohibitive it is a matter of little moment what higher rates may be fixed. As you have already been advised, the New Zealand Government can attach importance to the preferential treatment of its products only if and so far a this preferential treatment is capable of leading to actual trade, and as a further indication of the attitude of the Canadian Government towards New Zealand trade I understand that in the new Canadian tariff an increase of four cents a lb. has been imposed on New Zealand meat.”

The New Zealand Government’s action was not taken on any specia' grounds of reciprocity, but on the ground that tlie New Zealand Government was not disposed, and indeed, could not afford to make remissions of taxation without corresponding advantages. Its policy was to encourage the importation of goods from those countries which themselves were prepared to purchase New Zealand goods. The New Zealand Government had, ■however, attempted to retain a true reciprocity with Canada by providing for a. remission of customs duties on Canadian goods estimated to be at least equal to the Canadian remission of customs duties on New . Zealand goods. | APPORTIONMENT OF BLAME. “I appreciate the difficult position created between the two Dominions. .It is the view of His Majesty’s Government in New Zealand that this difficulty' is due solely to the action of the Canadian Government in taking drastic steps against the New Zealand butter trade before any possibility of negotiations was afforded to the New Zealand Government, and to the Canadian Government’s reluctance to enter into effective conversations. The difficulty is one i which the New Zcaliind' Government for ’ their part are entirely willing io attempt to remove as soon as the iCanadiaii G'b'?- ' eminent find it possible to undertake

definite negotiations to that end, and as already advised His Majesty’s Government in New Zealand would welcome an early visit by a Canadian Minister for that purpose.” Tho Prime Minister of Canada on July 28 expressed regret that'it was not possible to admit Canadian goods to New Zealand under contract at the rate of duty obtaining before the latest tariff increase, but appreciated the concession in regard to goods in transit. As to prospects of early negotiations with a view to completing satisfactory trade arrangements, he said, the Canadian Government was prepared, “now as at all times since assuming office,” to undertake negotiations to that end, but prospects did not appear promising if the New Zealand Government maintained the attitude taken in recent telegrams and recent policy.

THE FUNDAMENTAL DIFFICULTY.

The fundamental difficulty, not only during the past months but for some years past, had been the absence of a direct agreement .between New Zealand and Canada baged. upon full consideration of market opportunities and producers' interests in both countries. In 1925 the Canadian Government, in addi- ' tioh to continuing British preferential rates, extended to New Zealand without seeking any special advantage in return the concessions granted to Australia under the trade agreement with that Dominion. It was obvious that concessions of this unilateral character, dependent on fortunes of agreement with another Dominion, did not afford a permanent basis of trade, and that in its own interesis_,New Zealand might have been expected to seek a direct agreement. Aside from a suggestion in 1928 which was not followed up by New Zealand, that did not ’ appear to have been done until the sudden expansion of butter exports complicated the situation. The Canadian Government on assuming office in August last year was faced with announcement of New Zealand’s intention to impose the former general tariff rates on Canadian motor-cars in consequence of notice given in April of the termination of the extension of the Australian trade agreement to New Zealand. “We regret,” says the Canadian message, “on your journey through Sanada to London and in London our discussions did not yield definite results, but so far as this was due to any factor other than lack of adequate time we must decline to accept more than a reasonable share of that responsibility. We suggested that your delegation should return through Canada, as was done by the Australian Minister of Commerce, in which case a comprehensive agreement might have been reached in time for action by both oui’ Parliaments this session, and regret you could not adopt that course. The telegrams which have been exchanged since have been an inadequate substitute for personal discussion.

PART OF AN AGREEMENT.

“Your further objection that Canada ■extended during the past year- more favourable rates on butter to Australia than to New Zealand overlooks the essential factor that in Australia’s ease these rates were part of a definite, agreement, the extension of which to New Zealand terminated on October 12. In view of the fact that from October 1, 1925, to October 1, 1930, inclusive, the total 'Canadian importation of butter from Australia to which .a low tariff rate had been accorded in return for Australian concessions on Canadian goods amounted to only slightly more than , 5,000,000 pounds, whilst importation from New Zealand, which had made no agreement and received concessions only indirectly, exceeded 96,000,000 pounds, it is apparent that if any Dominion has ground for complaint it is not New Zealand. It is essential to bear in mind that Canada is itself a dairy country, and a pioneer in Government assistance towards improvement in quality, in co-operative marketing and in development of overseas markets. The circumstances which led to change from an exporting surplus of 24,000,000 pounds in the fiscal year 1926 to net importation of more than 40,000,000 pounds in 1930, including lessening of dairy production and diversion to other forms than butter, were clearly abnormal, and could not continue. Quite aside from tariff rates New Zealand could not reasonably have expected continuance of the huge exports of this period. As a result of development during the past year Canada is again on an export basis. The Canadian preferential tariff rate of 4 cents, which led to your cancelling of preference on motor-cars, was in many ways less than the New Zealand rate on Canadian butter. The present tariff accords New Zealand a preference of 6 cents, and we have already indicated willingness to consider the question further as part of a general agreement. The new trade agreement with Australia provides for 9 cents preference. The Canadian Government is also prepared to consider extending preference on other New Zealand products; and has, in fact, made a careful survey of fields. In any case, we have always been prepared to receive any specific suggestions as to products on which preference was specially desired.” UNABLE TO CONCUR. In acknowledging this message Mr Forbes declared himself unable to concur with the Canadian statement of the position. During the course of telegraphic correspondence since April 12. 1930, the New Zealand Government had intimated to the Canadian Government on not less than seven distinct occasions its desire to enter into direct conversations. Tho Canadian Government for its part not only declined to postpone its drastic action against New Zealand butter until such time as negotiations could take place, but in point of fact before conversations were possible actually doubled the prohibitive rate originally proposed; and during a period of sixteen months took no definite steps to accede to repeated requests for a conference to discuss in detail the questions

at issue. Indeed, on the two occasions when New Zealand Ministers actually put themselves in personal touch with Canadian Ministers the results entirely failed to convince the New Zealand Government of any desire on the part of the Canadian Government to enter upon effective discussions.

Mr. Forbes also was unable to agree that the fundamental difficulty had been the absence of a direct agreement between New Zealand and Canada (though such an agreement was suggested by New Zealand in 1928 and since April, 1930, the New Zealand Government had fruitlessly made every effort to enter into the negotiations necessary to arrive at such an agreement). Notwithstanding the fact that the balance of trade between the two Dominions was heavily against New Zealand the New Zealand Government raised no objection to the arrangement existing prior to Canada’s termination of the extension to New Zealand butter of the rates accorded to Australian butter, though it would sepm plain that if either Dominion had ground for compaint owing to the absence of such a trading agreement it was not Canada. The New Zealand Government noted with rifhret that the Canadian Government regarded the forthcoming general election in New Zealand as necessitating a further delay in the initiation of conversations. The New Zealand Government did not share this view and must accordingly reiterate its continued .willingness to receive a Canadian Minister at the earliest possible date and its desire to enter into negotiations with the least possible delay.