OTTAWA PACT

Timaru Herald, Volume CXXXVII, Issue 19750, 17 March 1934, Page 22

OTTAWA PACT

PRIVILEGES AND OBLIGATIONS PROTECTION AND QUOTAS The privileges and obligations of the Ottawa agreement are dealt with by the New Zealand Producers’ and United Kingdom Manufacturers’ Reciprocal Trade Federation In a policy statement. The federation maintains that for the privilege of free entry to New Zealand exports to Great Britain, plus certain preferential treatment under schedule B, given to New Zealand goods. New Zealand agrees to remove all revenue tariffs from her tariff schedule. These are referred to in article 6 and article 11. Article 7 is claimed to be the mos: important clause In the agreement from the British point of view, for in it no tariff shall be afforded against British imports unless it can be shown that similar goods are being made In New Zealand with reasonable prospects of success. When, however, the latter condition does not exist, then clause 8, a clause which it claims is looked upon by the New Zealand manufacturers as the most important clause In the agreement, Is to be met by the Tariff Commission inquiry, which shall apply the necessary protection to local industries. The federation points out that in this clause Britain acknowledges the necessity of protecting the New Zealand industries provided that those New Zealand industries are being carried out with reasonable prospects of success, but does not permit that the tariff shall be of sufficient height as to debar Britain from becoming a domestic competitor in the New Zealand market. Dominion’s Obligations. The federation relies upon the first clause of the Ottawa agreement for an unrestricted entry of New Zealand exports into the British market, but it recognises the qualifications of this clause, as mentioned in schedule A. This refers to butter and other milk products. In schedule A It points out that Britain promises definitely not to review the treaty for a period of three years, and this period will expire on November 15„ 1935. After that date, however, the clause says, if It is in the interests of the British producer to do so. Britain may apply a quota or a tariff on New Zealand exports. The main object of the federations policy is, therefore, to see that New Zealand fully carries out all her obligations under the Ottawa agreement, thus giving the British manufacturer all the privileges that he Is justly entitled to. It believes the goodwill of the British manufacturer toward New Zealand will safeguard for all time the privileges New Zealand now enjoys under the Ottawa agreement. The federation acknowledges the great sendee rendered to New Zealand by Its delegates at Ottawa, and it maintains that this would be more freely acknowledged by the commercial community If the importance of it were fully understood by It. The federation seeks the co-operation of • the New Zealand manufacturers to assist it in the removal of the tariffs on all goods that are referred to by article 7. Tariff Commission's Task.

It challenges the opinion held In many quarters, therefore, that New Zealand’s action in regard to tariff reductions will not In any way influence the British. Government in withholding a quota on New Zealand exports. It maintains that such an opinion is a denial of the existence of schedule A, and would turn the contract into a farce by deleting its sole penalty-clause.

In clause 8 the federation maintains that Britain has fairly acknowledged the importance of many New Zealand industries, and believes that they are entitled to protection. The federation fully recognises the great task of the Tariff Commission, and, knowing the full responsibility that rests upon It, it believes that the commission is carrying out its arduous duties as speedily as possible. The federation challenges the suggestion recently made in the press that if the quota Is the set policy of the Government, then there is no use fighting. It refuses to believe that either Great Britain or New Zealand would so far forget their dignity or duty as to permit the Ottawa agreement to become a mere “scrap of paper,” and the fine work carried out by the delegates of both countries at Ottawa to be thrown in the wastepaper basket. Prices and Purchasing Power.

It also challenges the suggestion that any Government which is endeavouring to raise prices deserves the whole-hearted support of the community, as the federation does not believe that this can be done either by a quota or tariff. It believes it to be infinitely more important to raise the standard of living in both countries, that is, by giving the purchasingpower of the people its full value, and not have it devalued by the operation of exchange, quotas or tariffs. The Ottawa agreement, in its opinion, Is an instrument to which all present tariffs must conform, and should be a guide to the future commercial relationship between New Zealand and Great Britain. It believes that, if given an opportunity, the agreement will bring about a better understanding between Britain and the Dominion, without in any way impairing the economic development oi the industries in either country.