The Waikto Times With which Is Incorporated The Waikato Argus. THURSDAY, MARCH 7, 1929. AFRICA’S TRADE TREATY.

Waikato Times, Volume 105, Issue 17654, 7 March 1929, Page 6

The Waikto Times With which Is Incorporated The Waikato Argus. THURSDAY, MARCH 7, 1929. AFRICA’S TRADE TREATY.

The South African Government has concluded a treaty with Germany, the provisions of which have caused considerable comment in Britain and aroused much controversy in the Union, where opposition is being shown to the proposal, so much so that the Cabinet, claiming that it possessed the right to conclude-treaties, decided not to run the risk of submitting the document to the Senate for approval. The treaty is remarkable in that it extends to Germany under a most-favoured clause the benellt of ail tariff preferences which the Union may grant in future, and should present preferences be extended to other parts of the Empire, Germany must under the new treaty automatically participate in them also. The treaty thus aims a blow at the very foundation of Empire trade preference- While the treaty was under discussion the Federation of British Industries pointed out that the effect of such departure would probably be to prejudice trade between South Africa and Britain in both directions. The Federation stressed the fact that the United Kingdom was overwhelmingly the most important customer of South Africa, purchasing as it did in 1927 £48,000,000 worth of South African products as compared with £18,000,000 worth purchased by all foreign countries combined. South Africa in the same period imported £32,000,000 worth, of British

goods, leaving a balance of trade in favour of South Africa of £16,000,000. In the case of Germany the exportation of South African goods to Germany was only slightly over £4,000,000, whereas the importation of German goods into South Africa exceeded that amount by £500,000, showing an unfavourable trade balance for South Africa. The Federation recognised the value of the preference granted by South Africa to the United Kingdom goods but, on the other hand, they pointed out that South Africa received very substantial counter-benefits from Great Britain. Great Britain granted to South Africa in actual preferences alone in 1 927 approximately half the value of the preferences received by her. In the second place, the British taxpayer provides £1,000,000 per annum for the work of the Empire Marketing Board for stimulating the marketing and sale of Empire products, a work which is undoubtedly greatly assisting the South African producer. Thirdly, capital has been needed, and will be needed, for the economic development of the Union, and the provision of such capital from British sources has been facilitated and rendered cheaper for South. Africa by the operations of the Colonial Stock Act of 1900. According to the last official return existing loans under this Act amount to over £100,000,000 —a substantial contribution towards the development of South African Finally, it is pointed out that Britain bears the main cost of Imperial defence. South Africa enjoys these advantages automatically as a British Dominion. The cash value of the Imperial connection is therefore considerable, although its value is not usually computed entirely in terms of sash. In conclusion, the Federation expressed the hope that the South African Government would consider well before adopting a policy which would be extremely harmful to British trade interests* with an inevitable repercussion upon the power of Britain to absorb South African products. In view of the natural interest in a flourishing reciprocal trade between Great Britain and South Africa, the gravity of any step tending to weaken the commercial., bonds between (he two countries could not, the Federation declares, be over-estimated. The foregoing indicates .that I lie Treaty is regarded with considerable misgivings in Britain. On the other hand it is hailed with much satisfaction in Germany, where it is regarded as a triumph for the Government’s foreign policy and also as a break-down of the principle of Empire trade preference. It is hoped that similar covenants will he concluded with other British Dominions,