The Wanganui Chronicle THURSDAY, AUGUST 31, 1950. THE BLUFF OF ARGENTINA

Wanganui Chronicle, 31 August 1950, Page 4

The Wanganui Chronicle THURSDAY, AUGUST 31, 1950. THE BLUFF OF ARGENTINA

ARGENTINA is faced with a difficult position in respect to her meat exports to the United Kingdom. Were the United Kingdom allowing the meat of the exporting countries to be placed on a freely operated market at Smithfield no problem would arise, for the demand would fix the price level in relation to the supply from all sources. A large shipment of meat from the South American Republics other than Argentina, would tend to bring down the price of Argentinan meat unless that, country severely curtailed the volume exported. The whole of the South American supply is of one. kind, the sheep being fed on Pampas grasses. The sheep of New Zealand, being fed on English grasses in a country that has a plentiful rainfall which docs not vary to any marked degree over a considerable portion of the country, the meat sent, from this Dominion is of better eating qualities. On a free market the consumers of England are prepared to pay a higher price for the better product. Some of Australia’s meat is of high grade by reason of the quality of the pastures, but sheep from other areas are not so well fed and consequently the palateability of this meat is of a lower standard. The relationship between the highgrade meat imported into the United Kingdom and the home grown product is continually changing according to the economic factors that happen to be operating at the time. .These same factors operate to expand the demand for the superior imported meat and to contract the demand for the inferior imported meat at one time and to carry the strength of the demand to the lowest product at other times. This interplay of the market cannot be estimated. The planner can examine statistics and draw his conclusions therefrom, but the weakness of statistics is that they record past history. They are never up-to-date. It is here that the operation of the free price market is superior in relating the forces of supply and demand and in fixing the relationships that are constantly in a process of flux between the various 'grades of meat that are available and’the total or overall consumption of meat.

The re-establishing of a free meat market would bring the situation nearer to reality, but unfortunately ihere are difficulties in the way of taking this most natural step. This is particularly true in respect to the produce of the Argentinan Republic. The British investors provided the capital wherewith the railway system of that country was established and developed. Now the Argentinan Government has taken over these assets and the bill is not fully paid. Further, there are difficulties in regard to the payment of pensions to ex-employees now resident in England wliile those still in the employ of the Argentinan railways find that the Government side of the contract of employment, is not being kept in full. Mr. Ernest Bevin has pointed out that there is a sum of about £20.000.000 outstanding due by Argentina to United Kingdom creditors and that, business cannot be ignored. Further, Argentina wants to secure free, dollars in order to make purchases in the United States of America. When a triangular trade between the three countries is a possibility the provision of credits transferable from London to New York is one of the conveniences of international trade. But the United States of America makes trading with herself very difficult indeed, and by blocking the inflow of goods by the employment of various methods she makes difficult the accumulation of dol’fr credits in the United States of America by the United Kingdom. Reciprocal trade on equal terms would probably result in the quick accumulation of dollar credits by the’United Kingdom, but equality of trading is one thing which the United States of America cannot concede because it would be unable to stand up to the efficiency of the United Kingdom manufacturers. But not only is the United States unable to concede equality of trading conditions with the United Kingdom but she is also unwilling to accept the meat produced by the Argentinan Republic. The flow of trade via the United Kingdom having been interrupted, there is no ini mediate prospect of the Argentinan demands upon America beingsatisfied. ... ■. 1 Argentina having suspended exports ol meat Io the United Kingdom for two months is now faced with a large inflow of meat into’her freezing works but with no outlet. The meat is now either on the hoof or on the hooks and it has been produced with a view to being in the United Kingdom and nowhere else. Die United Kingdom is the only worthwhile meat importing country in the world and there is at the moment -none other. The current talk of reconditioning the Argentinan meat industry to supply the South American demand will deceive nobody. 1 irst, the problem for the Argentinan Republic today is to export her lamb ami mutton now in existence and for some reason this commodity is not in demand with the South Americans. Even if it were the demand would be insufficient to absorb the Argentinan supply. The negotiations between the United States of America, the United Kingdom, and Argentina must now be at a critical stage. It. is in the long-run interests of this Dominion to see that the United Kingdom concludes these negotiations with Argentina in a* satisfactory manner. It is. therefore, undesirable for those who are now charged with the responsibility of negotiating the! new produce agreements between New Zealand and the United Kingdom not to plav into the hands of Argentina and to help that, country s negotiators to make further price demands upon the United Kingdom. This is especially undesirable at a time when it. can be confidently expected that the world price level for manufactured goods will recede unless the stockpiling efforts of the various countries counteracts this tendency. If stockpiling is to dominate the economic situation then this is certain y_not the time in which to encourage food suppliers of the United Km ta to wrin- the last shilling out of the Treasury at Whitehall. kieiy 1 In Ze +’nn<l sent to the United Kingdom for stockpiling purpound ot food sent to the H 8 , s uot a pro . P 0S Ti JwMeb "of cone rn to Seuor Peron of Argentina he cannot £e xnto have “interest in these wider consideration. Thau’however. is not a view which can be shared by the people ° £ be urged that although Argentina may be bluffing when she talks of reconditioning her meat export, trade to the advanced machinery and rolling stock could most certainly not s upp t ] wug h she did succeed in that Argentina needs to nd *-’ ’ n{ it fron , Ihe United Kingdom diverting her trade 01 so I . » find them thev in their to south American the twoturn base nothing < United States of America, cannot 1U without the end being reached.