RECIPROCAL TRADE

Taranaki Daily News, 10 February 1934, Page 12

RECIPROCAL TRADE

NEW ZEALAND’S POSITION. RE-EXPORTS NOT CONSIDERED. The following statement regarding reciprocal 1 trade between New Zealand and Great Britain and foreign countries is supplied by the New Zealand Manufacturers’ Federation:— “There is a very general impression that we in New Zealand are importing from foreign countries far more than the value of our exports to foreign countries, i This is incorrect. Similarly, there is a common, and equally mistaken, idea that our imports from Great Britain are considerably less than they should be on a reciprocal trade basis. New Zealand’s position is thus shown in an unfavourable light to those in England and New Zealand who believe in the principle of reciprocal trade.

“The explanation is that one large item in' our export account has hitherto, as a rule, been credited to our trade with Britain, although it should have been credited to our trade with foreign countries. Reference may be made to the 1934 Year Book, page 212, which draws attention to ‘the considerable quantities of produce which are shipped to London merely as a convenient depot for reshipment to the Continent and America.’

“Before the slump this class of exports amounted to £8,000,000 a year; while, in 1931, it was £4,119,000, and we may assume at least the same figure for 1932 and 1933. The point is that this item is usually, and mistakenly, included in our exports to Britain, whereas it should, in fact, be deducted from the total of our exports to Britain and added to the total of our exports to foreign countries. Making this’adjustment, the 1932 figures for foreign countries are as follow:— Exports direct ..... £2,508,000 (N.Z.) Exports, via London 4,119,000 (N.Z.) Total exports .... £6,627,000 (N.Z.) or £5,965,000 (sterling) Imports 6,486,000 (sterling) “This shows that our trade with foreign countries is out of balance by merely £500,000 instead of the large sum usually quoted. “Our trade, visible and invisible, with Britain also is shown in a different light when allowance is made for this item. Net exports to Britain, after deducting £4,119,000 shipping via Britain to foreign . countries • £24,502,000 (sterling) Imports from Britain £11,442,000 (sterling) Interest on public debt 8,250,000 (sterling) Freight, dividends, etc. 3,500,000 (sterling) £23,192,000 (sterling) “Our reciprocal 1 trade with Britain is thus only about £1,300,000 (sterling) out of balance. It may be significant that our excess of imports from Australia is just about equal to our balance on tne wrong side with Britain. In other words, if we imported from Britain about £1,300,000 of goods now imported from Australia, both accounts would balance. Whether there would be any advantage in this is another question. . “Regarding the item ‘freights, dividends, etc.,’ shown above, reference may be made to page 203 of the Year Book. The item comprises, ‘interest and dividends on overseas capital invested privately in the Dominion; outward shipping freights, charter money, passage money, etc., earned by overseas vessels for the carriage of New Zealand produce and passengers; expenditure abroad by New Zealand tourists and travellers;, and miscellaneous Government expenditure aboard.’ The big items are, of course, (a) freights, and (b) interest and. dividends on overseas capital invested in the Dominion. There is a set-off in our receipts from tourists visiting New Zealand and certain other minor amounts. A reasonable estimate of the item as a whole is roughly £3,500,000.