The Wanganui Chronicle MONDAY, JUNE 28, 1948 THE GENEVA TRADE AGREEMENT

Wanganui Chronicle, 28 June 1948, Page 4

The Wanganui Chronicle MONDAY, JUNE 28, 1948 THE GENEVA TRADE AGREEMENT

’’pHE Geneva Trade Agreement, which the Government, is asking Parliament to adopt is, on Mr. Nash’s exposition an agreement for the freeing of world trade while preserving to New Zealand every right to do no such thing. Trade cannot at one and the same time remain restricted and become more free This country cannot have it both ways: it must choose between being bond or free.

The general impression of eolitradietoriness which was conveyed by Mr. Nash’s exposition of the Geneva Agreement coupled by his affirmation that New Zealand’s restrictive policy in no way conflicts with the agreement leaves the general impression that the whole effort has not been worth while. It follows that if New Zealand may restrict her importations from other countries on the ground of defence against dumping, in the interests of maintaining full employment, and in the protection of other interests then so may other countries do the same. These being the excuses for the actions which have led to the present state of affairs it is clear that all the means of sustaining the present situation have been left in the hands of the Governments that have signed, or who will sign, the agreement. Where, then, lies the advantage of the agreement? Everyone will agree that the trade of the world must be made freer if a higher standard of living is to be enjoyed by the peoples of the world. But freer trade means freer trade and not anything else. If the countries are going to have freer trade there must be some important changes made in the economic set up of each and every country turning from a restrictive policy to a freer trading policy. Just as he who would have omelettes must break eggshells so the country that would have freer trade must lower what it has come to regard as its amour against trr.de competition. Freer trade means more competition and the one cannot be had without the other.

When dealing with the tariff concessions that the United States has agreed to in respect to New Zealand produce. Mr. Nash’s exposition does not go far enough. He has stated that the agreement provides for reductions in import duties imposed on the following New Zealand products if imported into the United States: Lactose, 50 to 25 per cent.; butter, 14 to 7 cents per lb.; mutton, sto 21 cents; lamb, 7to 5 cents. What he does not state is what ■will be the effect of these reductions. If the lower price still puts the New Zealand product out of competition in the market then the reductions mean nothing at all. For instance it may be asked what chance has New Zealand lamb competing with the American product when the New Zealand product carries a tariff loading of 5 cents at port of entry. This may easily mean that, with added profits, New Zealand lamb will curry a 10 cents a pound burden, when compared with the American grown lamb and 10 cents a pound on the retail price should be sufficient to kill any business. To parade reductions in tariffs without giving the new marketing conditions and proving that business can be done under such new conditions in an inadequate exposition. The whole of the tariff concessions may prove to be illusory 1 But what is the United States of America to get in return for these alleged concessions? What are the goods that America is gning to send to New Zealand on a lower tariff basis? What, is the prospect of their entering into this market and conferring benefits upon the consumers of this Dominion? Tariff concessions by New Zealand that continue to keep out American products are still no concessions at all. Further, what is the period of effective agreement between the various signatory countries. “Once the general agreement became operative it remained in force until January, 1951. Whereafter any country could withdraw after giving six months' notice,” said Mr. Nash. This gives to the present agreement a period of two and a-hnlf years to run for certain. Such a period of certainty is too short for any industry to change its organisation to cater for a demand from overseas. For instance, if the woollen mills of New Zealand do actually have it favourable market in the United States for a period of two and a-half years what prospect is there of any mills importing new machinery in order to enable them to exploit the market in the United States’ It would be too much of a gamble to enlarge the output of the mills because by the time the machinery was imported and installed the whole of the new export market might have disappeared As a promoter of trade and employment within New Zealand the Geneva Trade Agreement does not yet appear to be a very useful instrument. ' The Geneva Agreement was the subject of further negotiation at Havana. To what extent was the Geneva Agreement modified and amplified at Havana. The latter agreement has now been published but it is not possible in the brief period that it. has been made available to devote to it that intense study required for its full understanding. Mr. Holland has asked to what extent this Geneva Agreement ties New Zealand to Bretton Woods. What are. the implications of Bretton Woods insofar as New Zealand is concerned? This is a subject which Mr. Fraser promised would be brought before the House of Representatives, but it has not been brought before the House because the Labour Party is hopelessly divided upon the subject. The financial genius of Mr. Nash prompts him to support Bretton Woods, while the financial genius of Mr. Cotterill prompts him to reject it. Mr. Cotterill has made his position quite clear on this point. He does not supporr Mr. Nash To what extent does the Geneva Agreement circumvent the opposition to Bretton Woods and how are those members of the La hour Party going to act in respect to Geneva, seeing that it apparently means selling themselves downriver on Bretton Woods? The Opposition has declared that it will have nothing to do with adopting Bretton Woods by the side door. It is for the La hour members who have consistently opposed Brettor Woods to make plain what is their position today in respect to the Geneva Agreement. They must cither prove to the satisfaction of a now sceptical public that the Geneva Agreement does not bypass their opposition to Bretton Woods, or they must, stand convicted of having capitulated from their previous position to no visible purpose. Politics apart, the public will continue under a burden of its present sense of bewilderment, that so much labour at ;nternational conferences has brought forth so little in tangible and identifiable results. The present situation need not have arisen had the Government adopted the “Chronicle’s” suggestion to send Mr. Holland with Mr. Nash to the Geneva Conference. The Lender of the Opposition would then have been fully seized of the position as it developed—and he was entitled to be placed in such a position, not for his own, but for the country’s sake—and if Mr. Nash has been able to provide substantial benefits for this country, Mr. Holland could have, and would have, supported him. In the absence of success. Mr. Holland could have been a bio to provide Mr. Nash with support to show that the best possible had been achieved. The “alone I done it” attitude of the Minister of Finance in the past has, however, robbed him of that support which he could have had, and in its place put a dangerous opponent.