TRADE WITH GREAT BRITAIN.

Waikato Times, Volume 108, Issue 18168, 5 November 1930, Page 7

TRADE WITH GREAT BRITAIN.

(To the Editor.) Sir,—At a small meeting I attended a few days ago an informal discussion on the above subject took place. I was astounded to hear one gentleman argue that preference to Great Britain was a grave mistake. He argued that we were giving something for nothing and that it was costing us a huge sum of money. It is possible that other, people may agree with him, and I crave a little of your space to present the subject as it appears to me,

First: Have we given any preference to Britain? What we have done is to impose a duty of 25 per cent against Britain and increased the duty to 40 per cent against the foreigner. We have persistently during the last 20 years raised the tariff against Britain. Can we conscientiously call this preference? Some humourist put it this way: “Having drowned the British manufacturer in 20 feet of water, we added another 10 feet to drown the foreign manufacturer in.” Preference, as I understand it, consists in writing down the tariff 'against your friends and letting it remain standing against your enemies. If the tariff wall is so high that the British manufacturer cannot get over it, it is vei’y ,poor consolation to him that you have raised it another ten feet against the foreigner. My friend of the nonpreference crusade argued that we were giving hundreds of thousands of pounds annually to the British manufacturer. If my friend would only put himself in the place of the British manufacturer, he would find that before he could sell a single article in New Zealand he (the Britisher) had to quote a price 30 per cent plus freight and charges below the local manufacturer. That is to say, that for what a local manufacturer would get £IOO, the British manufacturer could only get £6O. The difference between the two prices, yiz., £4O, would go, £3O to the New Zealand Government and £lO to the shipping company and other agents. The next point he'made was that we were giving something for nothing. The reply is that Britain is the only country in the world that gives us a free market. 'Of our total exports in 1928, amounting to £56,188,481, die United Kingdom took £40,510,075, other British countries took £6,745,588 and foreign countries £8,932,818. In return for this magnificent purchase on the part of the United Kingdom, we purchased from Britain goods to the value of £22,531,880. From other British countries we purchased goods to the value'of £'9,809,281, and from foreign countries £12,545,10.’5. This means' that‘Britain pays us £2 for every £1 we pay her, and, on the other hand, we pay foreign countries £1 10s for every £1 they pay us. Surely if there is any “giving” it is that Britain gives us and not we who give Britain, ; (My friend went on :to say that “it was up to Britain to give us preference by putting a duty on all foreign foodstuffs and raw materials. I wondered if he had ever taken the trouble to think this matter over. The. position of British trade is as under:—• . •- ■■ ; Imports.

This represents a total import and export trade of £1,494,500,000, of which £585,500,000 is done with Empire countries and £909,000,000 with foreign countries. Now let us consider what Messrs Forbes and Soullin and Lord Beaverbrook propose' to do to put the Empire on its feet? They propose to impose a tax of 10 per cent on all foreign foodstuffs, raw material and manufactured' goods and admit Empire products free. This means that imports from foreign countries to the value of £909,000,000 would be taxed and imports from Empire countries amounting to £585,500,000 would be [ admitted free. It is reasonable to I suppose that the effect would be that i the total imports would be raised in price by 10 per cent; that is to say that Britain would pay £149,450,000 more for her imports than she does at present. But this is not the end of the story. . There would be a wholesale and retail profit to add on the increased landed cost. Put this down at 25 per cent, which would amount to £37,362,500 —a total cost to the consumer of £'186,812,500. Of this sum the British Government would receive £91,000,000 in Customs tax, tut against that it is reasonable to suppose that British manufactured goods sold on the Home market would be raised in price to the full extent of the 10 per cent duty on imported goods with which they have now to compete on world’s parity. The result would be that the cost of living in Britain would be increased from 20 to 15 per cent. Consequently you would either have to raise the wages of the worker or reduce his standard of living. What do we propose to give Britain in exchange for this 10 per cent preiference? Mr Scullin said: ,‘Austra[lia’s policy was first to encourage the I support of Australian manufactures.” Mr Bennett said: “Empire free trade , is undesirable and impossible.” Mr Forbes has shown recently that he intends to protect local production to a greater extent than any previous Government. Sir G. 'Corbett,, (the Indian delegate): “India was unable to commit herself to any scheme of tariff 1 reference within the Empire.” To my mind the whole scheme is unadultered selfishness on our part. We are asking Britain, in addition to tuying twice as much from us as we buy from her, to give us 10 per cent more than world parity, and we offer less than nothing in exchange. Britain’s trouble to-day is that owing to her huge taxation, brought about by honestly paying her creditors and allowing her debtors to swindle her out of what they borrowed to save their existence as nations, she is unable to

produce as cheaply as her competitors. She is gradually losing her foreign trade, and we (her children) propose to raise her costs of production still higher, so that we may gain an advantage at her expense. My idea of free trade with Britain is to do for her exactly what she does for us—admit all her manufactures free, excepting such, of course, as are taxed purely for revenue purposes, such as wine, spirits, tobacco and luxuries. If we did this all our troubles would disappear. Our cost of production would be so reduced that we could make a fortune with butterfat at Is per lb. Our cost of Government and of local body expenditure would be reduced 25 per cent; so also would be the cost of building railways and all other activities. Our “protected” workers would gain more as consumers than they would lose as producers. Last and not least we should give real help to our Motherland. —I am, etc., FRANK COLBBCK. Morrinsville, Nov. 1, 1930.

From From British Foreign Empire Countries Total 1928 Millions. Millions, Millions. £ £ £ Foodstuffs . 187 316 503 Raw material . 71 197 268 Totals . 258 •513 771 Exports. To To British Foreign Empire Countries Total Millions. Millions. Millions. £ £ £ ManTact’r’s ' . 275.7 303.2 578.9 Other goods . 52 92.7 144.7 Totals . 327.7 395.9 723.6