TRADE WITH CANADA

Timaru Herald, Volume CXXV, Issue 18652, 22 August 1930, Page 3

TRADE WITH CANADA

TARIFF RETALIATION. STATEMENT BY PRIME MINISTER. By Telegraph—Press A*wcc)ation. WELLINGTON, August 21. In a statement Is afternoon to the House of Representatives on the subject of trade with Canada, the Prime Minister (Hon. G. W. Forbes) said the Government has for some time been in communication with the Government of Canada concerning trade relations between the two countries. It would be remembered that in 1925 a trade agreement was made between Australia and Canada under which certain reductions in duty were made on Commonwealth products entering Canada. On Ist October, 1925, the benefits of this agreement were extended to New Zealand goods. After giving details indicating the extent to which New Zealand’s export trade had increased under the agreement, Mr Forbes continued:— ‘‘lt will be noticed, however, that notwithstanding the increase in exports from this Dominion to Canada, the balance of trade was still considerably against New Zealand. During 1929, butter formed over 80 per cent, of our total exports to Canada. As a matter of fact, the butter sent to that Dominion formed about 20 per cent, of the total exports of that commodity from New Zealand. Ever since New Zealand in 1903 adopted a system of preferential tariffs, the benefits of lower duties have alw r ays been extended to Canadian products. It is estimated that the concessions in duty granted by New Zealand to Canada are much greater than those made by Canada on New Zealand products, even with the lower rates provided for in the Australian agreement in April last. The then Canadian Government suggested that discussions should take place between the two countries with a view to negotiation of a direct trade agreement. At the same time they informed us that after the expiry of six months the benefits of the Australian agreement could not be granted to our products, but that they were willing to extend the British preferential tariff rates to New Zealand goods, in return for continued grant of the British preferential tariff rates in force in New Zealand to Canadian goods. Shortly after this, in May, 1930, the Canadian Parliament passed an Act increasing the British preferential tariff rate on butter to a minimum of four cents per lb., which was the rate under the general tariff in April last, at the same time countervailing duties were imposed on butter, fresh meats, eggs, oats and potatoes. The effect of these countervailing duties is that if the New Zealand rate on Canadian goods concerned is higher than that in force in Canada on New Zealand goods, the higher rate can be charged on our products if imported into Canada. Since April last we have been in communication with the Government of Canada with a view to the maintenance of the duty of one cent, per lb. on New Zealand butter, until a direct trade agreement could be made and implemented by legislation here. Negotiations have been delayed owing to the Canadian general election which took place towards the end of last month. The new Canadian Administration has now informed the Government in effect that they cannot extend the Australian agreement rates to New Zealand products beyond October, but that they are walling to enter into negotiations for a direct trade agreement. The Government is as a general rule averse to a policy of tariff retaliation, especially with respect to a sister Dominion, but it is felt that the matter is of such moment to New Zealand, and especially to the dairy industry, that some action must be taken. It has therefore been decided that Canadian motor vehicles and accessories are to be placed on the general tariff in force in April last. An Order-in-Council bringing the new duties into force will be gazetted to-day. It is not proposed to apply the increased rates to goods already exported from Canada, as it is felt that the action should be taken so as to inflict as little hardship and inconvenience as possible on our own importers. The Government is quite willing, pending completion of a direct trade agreement, to replace Canadian motor vehicles on the British preferential tariff, provided that the Canadian Government will similarly continue to grant to our products the rates fixed by the Australian and Canadian Government. As I have already informed the House, I propose to discuss this matter with the Government of Canada w 7 hen passing through that Dominion on my way to the Imperial Conference.” The Hon. J. G. Coates: ‘‘Has the Canadian Government been advised of the decision?” Mr Forbes: ‘‘Yes.” NEW ZEALAND BUTTER. EXPORTS TO CANADA. MAJOR ISSUE IN ELECTIONS. (From Our Own Correspondent.) VANCOUVER, July 5. The effect of the importation of Nsw Zealand butter into Canada has been made a major issue in the general election campaign by the Leader of the Conservative Party, Hon. R. B. Bennett, who rarely omits to denounce it in his speeches. The radio supplements newspaper reports in widely disseminating the bitterness of the Conservatives toward the reciprocity treaty with Australia, which was extended to New Zealand by Order-in-Council. All the ills, real and imaginary, that the dairy industry in Canada is suffering are laid by Mr Bennett at the door of New Zealand.

The Conservative Leader has gone so far as to suggest that the Prime Minister has more consideration for New Zealand than for Canada. “Is he Prime Minister of Canada or New Zealand?” he asked. “I suggest he go to New Zealand; we can spare him here.” Address in Dairying District. A sample of Mr Bennett’s invectivedelivered in a dairy farming district, is as follows:—“The effect of the New Zealand agreement has been disastrous to the dairy industry, and you realise it here. From a country exporting 24,000,0001 b of butter in 1925, Canada has become an importer of 40,000,0001 b. All this has taken place in five years. Our dairying business has been lost. We have 140,000 fewer milk cows to-day than in 1925 and there has been a corresponding depletion in our swine.” Mr Mackenzie King ,in reply, states that increased prosperity in Canada has been the direct caus* «•! New

Zealand butter imports. Canada derived great benefit from the Australian treaty and export of goods under that treaty had resulted in more employmint for Canadian workmen. This meant more prosperity for the Dominion and a greater butter consumption. Enhanced prices had prompted New Zealand to get into the Canadian markets, and a condition W’hich was merely temporary had resulted. The Prime Minister has undertaken to consult the wishes of Canadian dairy farmers and the industry generally when the new treaty is drawn up, to replace the existing one. Statement by Mr King. The controversy regarding the New Zealand agreement has become somewhat confounded by a somewhat serious statement made by the Prime Minister in an election speech at Calgary this week. “Since my arrival in Western Canada,” said Mr King, “I have received numerous representations to the effect that there are strong grounds for believing that the recent reduction in prices to the farmers on cream is due to the secret operation of a combine, which, in order to increase its profits, is reducing the prices to farmers on cream purchased from them, without giving the consumers a corresponding benefit in the prices at which butter is sold. “It is the belief of those who have made their representations to me that the importation of New Zealand butter under the New Zealand treaty is being made the cloak for the operations of the combine.”