DOMINION’S GOODWILL TO BRITAIN.

Taranaki Daily News, 22 March 1935, Page 14

DOMINION’S GOODWILL TO BRITAIN.

POSITION PLAINLY STATED. (To the Editor). Sir,—lt is high time to plead the cause of New Zealand trade.. In the light of the latest grave developments this country is accused of buying not enough imports from Britain. It is asserted even that given “reciprocity,” that is more, imports, ‘ Britain will renounce restrictions. But the White Paper is the best answer to this ingenious calculation. Each of the 1.5 million of inhabitants of this country is buying £6 14s 7d worth of British goods per year, keeping still the world’s record. The invisible British imports (services) make every New Zealander pay in London at least £5 15s in addition. This gives a minimum total of not less than £l2 9s 7d per head, in average, per year, or 249 s 7d. Each of the 40 million of inhabitants of Britain is buying some 17s 9d worth of New Zealand products per year. That is all—as there are no invisible imports sold, in return, to Britain. As an instance of individual reciprocity (as between Tom working in London and Jim working in Auckland) this does not seem to come up to equality in mutual rights or benefits. British imports are selling in New Zealand at full* values (paying for costs, freights, exchange, duties, extras and profits) while New Zealand products in Britain are commanding pitiful prices hardly amounting to half the real costs. It is difficult to discover any frugality in expenditure we are making on imported British wares compared with few years ago (the New Zealand Manufacturers’ Federation insists that Britain, under preference, is selling goods to us at a higher price at which they sell to other countries). But the British public bought butter, for instance, at bargain prices and obtained ,for £35,000,000 what they would have had to pay £69,000,000 for four years ago. On New Zealand butter alone Britain’s savings were as good as £12,000,000 in cash last year. Add like gains obtained on meat, fruit, wool, honey, pork etc., shipped to Britain, and the immeasurable losses of New Zealand producers trading with Britain will appear as the price our country is cheerfully paying, over and above the cash price for British imports, to loyalty and the lure of “free entry.’’ We have been furiously fighting quotas, having no regard at all to prices, and now have declined the meat levy proposal offered instead. When Britain went off the gold standard the prices were bound by all laws,’ morals and rules, to jump 40 per cent. But they went down in depreciated currency instead, in order to comply with the eternal pledge of *‘cheap foodstuffs” in Britain at any costs. The levy proposal demands thart the New Zealand farmer pay a portion of the grim value realised in London in direct subsidy to the British producer, thus making our markets in Britain to fall more and more. For a country with 89.5 per cent, of exports going to London, this is indeed a serious dilemma, at which Australia with her 51.7 per cent, of exports to Britain (and 40.51 per cent, going to foreign countries) can figuratively smile. Although New Zealand secondary industries, quite useless in our struggle to obtain more income from exports, are blocking the expansion of “reciprocal” trade with Britain to the extent of their’ own considerable local developments, farmers are keeping the imports high. Seven years ago, when exports of our primary products reached £56,100,000 in gold sterling, we were potentially able to spend up to £46,000,000 to buy British goods. To-day we have barely £28,000,000 at our disposal for physical trading (some ■ £18,800,000 in gold) through no fault of ours. This country cannot pay Britain for more than the value of her sales in Britain less the amounts of interest, freights, marketing expenses etc., also payable in London. Thus emerges, covers and dominates everything the Question of Payable Prices in Britain. But New Zealand trade, nevertheless, never ceased to give splendid and most loyal treatment to Britain. Practically all her imports come here only from Britain', with the exception of commodities and goods not procurable from London and sundry merchandise supplied by foreigners who beat double and treble duties-barriers erected to protect British importers of similar goods. Following Ottawa a lowering of duties over a wide range of British imports was made. To-day British imports show a marked rise owing to the stabilisation of the exchange rate coincident with last year improvement of world’s quotations for our wool. Yet we hear offensive propaganda to the effect that this country is not giving a fair deal to Britain and that the £9,000,000 we pay cash to importers of British goods is not sufficient to them, as we are selling the fruits of our labours for far more. There is nothing more oppressing than such tactless announcements, which disregard the main elements of economic, inter-relations between Britain and New Zealand, and more misleading than the idea of improving things by buying our strength. The inevitable improvement in trade with Britain must come only through curtailing our exports to Britain. Hitherto we were assuming that Britain is a bottomless market at profitable prices. To-day we must realise that Britain is neither bottomless nor profitable. The plain fact is that it is futile to expect a mutually profitable trade between parties, one of which reluctantly consents to buy at unpayable prices only (and sells at high ones) and another continues enthusiastically to buy at top prices only (and sells at ruination rates). A special treaty, to make even the differences, is now necessary more than ever to be entered into between Britain and New Zealand, to regulate reasonable volume and value of mutual imports and to have due regard to all economic, financial and friendly bonds and ' ties. The first step to “reciprocity” of trade with Britain is the reciprocity of prices. The advocates of “reciprocity” should really do all they can to get for this country better prices at the other end, because we are paying them, at this end. more than fair and well. Failing which, we should drastically cut down their prices, just as ours were cut in Britain. Like Britain, the New Zealand trade has now to discriminate how, why and to whom to sell products and buy requirements, on proceeds. This country has and always will have unshaken goodwill to Britain. This country is doing her best, encouraging in every way imports from Britain, and obviously cannot do better, I am sure

New Zealand will not let herself to take unduly check at the recent “adamant" attitude shown by Britain, and will remain fully appreciative to the interests of the Motherland, taking the heed to arrange for complementary, not competitive, trade with- other nations at once. I hope, besides, that the “reciprocity” imputers will have no cause to blush that Lord Nuffield himself, very much interested in New Zealand trade with Britain, left this country with such significant statement: “there is no Dominion or country in the British Empire which does more than New Zealand by way of reciprocal trade with Great Britain.”—! am, etc., ALEXANDER S. TETZNER. Patumahoe, March 12.