INTER-EMPIRE TRADE

Evening Post, Volume CXII, Issue 59, 7 September 1926, Page 21

INTER-EMPIRE TRADE

;=■ * | | 1 INCREASING VOLUME. ! j ! DOMINION MANUFACTURE. j j I ITS RELATION TO EMPIRE. I I f ; , I! m

By Q. W. Clinkard, M.Com., Acting Secretary, N.Z. Department of Industries and Commerce,

The desirability of encouraging trade within the Empire is increasingly recognised among all sections of the community, and no dissent from this doctrine has been expressed by any of the representatives of importing or manufacturing interests or by Protectionists or Freetraders. The subject is perhaps unique in the unanimity of opinion which gives it support. There are, however, certain aspects of the matter which receive less consideration than their importance warrants. It is often tacitly assumed that Empire trade is synonymous with trade between this Dominion and the United Kingdom, and notwithstanding the fact that our preferential tariff applies to the products and manufactures of other Dominions and colonies, the extent of our trade and financial connection with the United Kingdom tends to concentrate attention merely on that section of Empire trade which has a direct relation to the Motherland. While the great importance—particularly to this Dominion —of trade ■ with the United Kingdom will be recognised and acknowledged by all, the advantages of the general policy of inter-Empire trade have substantially the same application to all sections of our trade with British countries.

RAW MATERIALS.

Another feature of the subject which does not perhaps gain adequate recognition is the fact that Empire trade is by no means confined to the exchange of foodstuffs and manufactured articles. There is a wide field of development in the greater exchange between British countries of the raw materials necessary in manufacture. In this connection the work of the Imperial Institute is worthy of commendation and support, and the recent reorganisation of the institute and the development of interEmpire research should tend towards the encouragement of Empire production and exchange of industrial raw materials.

MUTUAL TRADE THAT COUNTS.

The Great War has undoubtedly had a marked effect upon the volume of business transacted between British countries, and an examination of the statistics in this respect reveals points 'A special interest. Dealing firstly with the trade of the United Kingdom, it will be seen that the exports of British produce and manufactures in 1913 reached a total of £625,254,000. Of this 37.2 per cent, was shipped to countries within the Empire. In the year ended March, 1925, the exports reached £768,665,000, 38.1 per cent, of the total being the Empire's share, while for the year ended March, 1926, the figures are £715,433,000 and 40.4 per cent, respectively. On this subject the president of the Board of Trade (Sir Philip Cunliffe-Lister) recently pointed out that the proportion in 1920 was only 342 per cent. In that connection the president said: "That year was one when you could sell anywhere and you could cancel a contract and take up another and . . . while during a period A boom you can sell where you please and any market will take your goods, in a time of stress it is the mutual trade iwithin the Empire that counts."

A GROWING PERCENTAGE.

In the first quarter of 1924 the Kingdom's exports to the Empire were 41.5 per cent, of the total, in the first quarter of 1925 42.35 per cent., and in 1926 45.81 per cent. If consideration is restricted to exports of manufactured goods, the importance of the Empire markets is more clearly apparent. In the calendar year 1924 (the.latest year for which information on this point is available) 46 per. cent, of the United Kingdom's exports of manufactured gopds were shipped-to British countries. In 1913 the proportion was not quite 40 per cent. Of 'the Kingdom's exports to foreign countries 28 per cent, are fully manufactured articles, while the exports to the Empire are to the extent of 38 per cent, fully manufactured goods. -Both in character and in volume, therefore, Empire markets are for the United Kingdom increasingly important.

THE DOMINION'S SHARE

In even greater degree the overseas Dominions are increasing their share of the importations of the Homeland. In 1913 24.9 per cent, of the total came from British countries; in the year ended March, 1825, the proportion was 27.2 per cent., and in the year ended March, 1926, 30.6 per cent. Canadian exports in 1913 were worth, in sterling, approximately £77,586,000, of which just over 50 per cent, went to British countries. Her imports in that year were £138,000,000, less than 25 per cent, coming from within the Empire. Canada's total trade with British'countries represented over £72,000,000, or more than 37 per cent, of her total external business. By 1924 she had almost doubled the total value of her imports and exports, but while the Empire's share of this .has moved up from £72,----000,000 to over £130,000,000, this latter figure now represents only 32 per cent, ■of the total. Only 42 per cent, of Canada's exports and 22 per cent, of her imports now represent trade within the Empire. Australia has had a somewhat similar experience. The exports of the Commonwealth in 1913 (totalling nearly £79,000,000) were sent to the extent Ox over 56 per cent, to British countries, while over 72 per cent, of the imports (which also amounted to about £79,000,----000) came from the Empire. The value of Australia's trade with British countries was therefore in 1913 nearly £102,----000,000, o"r over 64 per cent, of the total. In 1924-25 Empire trade for Australia represented a total of £177,----000,000, or only> 55 per cent. of. the gross exports and imports. A substantial fall has taken place in respect of imports from the Empire, which are now only 58 per cent, of the total imports. South Africa too, whjle maintaining a 'very high proportionate business with other British countries, could not maintain the high percentage of 82 recorded on the average of the year 1910-14. In recent years this has fallen to 76 per ecnt.. The total external trad« of the

Union has, of course, increased very substantially.

OUR OWN TRADE TOTAL.

Our own Dominion in 1913 sent nearly 93 per cent, of her exports to other British countries, and received 82 per cent, of her imports from these sources. The total trade with the Empire was then nearly £40,000,000. In 1925 the value of this trade had more than doubled, totalling, in fact, £85,856,000, but instead of the high percentage of 87 reached in 1913, exports to and imports from British countries now amount so less than 90 per cent. The percentage in the case of imports in particular has fallen from the 82 per cent, mentioned above to only 73 per cent, in 1925. It is abundantly evident, therefore, that while the United Kingdom is finding an increasingly important market 4n Britjsh Dominions, the Dominions are themselves increasing the proportion Oi the business which they do with foreign ■ countries. . This decline in the proportionate importance of Empire trade, however, has not prevented marked increases in the total value of such business between British countries, and even when allowance is made for the advanced level of prices since 1913, the volume of actual commodities which have been exchanged between British countries has undoubtedly been greatly enhanced during the past ten or twelve years.

GREAT POTENTIAL MARKETS,

Costs of transportation and changes resulting from the economic development of the Dominions and colonies may to some extent and in relation to particular commodities militate Against any recovery in the proportion of the Dominion's external trade which will in future years be transacted with other British countries. Whatever may be the position in that matter, however, there can be no doubt that, with increasing population, the total of inter-Empire trade must continue to grow enormously. In particular, many of the specialised industries and trades of the United Kingdom (such as the cotton trade, the heavy electrical and engineering industries, and the shipbuilding industry) have as one of their greatest potential markets the overseas Dominions, and it is all to the benefit of such industries that 1 the economic advancement of the Empire should result in rapid increases in the population of the Dominions. That the Dominions will continue to develop their manufacturing production is as desirable as it is inevitable, and while the agricultural and pastoral industries must . make steady progress, their influence on the growth of population is much less rapid than is the case with the so-called secondary industries.

DEVELOPMENT OF MANUFACTURES.

The development of manufacturing production is both a cause and an effect of increasing population, and constitutes a recognised stage in the economic growth of new countries. Manufacturing industries will provide opportunities <f appropriate employment for thousands c * people' who could not find place in the primary or extractive industries. Such industries are in fact only a "rounding out" of the productive capacity of nations and an accepted feature of the broad principle of the division of labour. While all will agree that as far as possible production should follow the direction in which natural factors give the greatest assistance, there can be no justification for and no complete national success in neglecting other opportunities for increasing productive capacity.

IMPORTANCE IN NATIONAL ECONOMY.

It is of interest to note the extent to which manufacture has become a factor in the national economy of the several British Dominions. Canada in 1922 had 462,000 people engaged in manufacture, the value of their . production in that year being 2440 million dollars. Since 1900 the value of factory production in the great northern. Dominion has increased more than fivefold. South Africa in 1922-23 found factory employment for 1*72,000 of her people, and produced manufactures valued at £75,000,000. In 1911 the employees totalled 66,000, producing goods valued at only £17,000,000. The Commonwealth in 1913 produced manufactures to the value of £161,000,----000, while in 1923-24 this form of production represented £348,000,000. During the same period the number of factory iod from £20,500,000 to £48,250,000. ' In our own Dominion the development of manufacture is also marked. Factories (not including meat works or butter, cheese, and condensed milk factories) employed in 1910-11 60,752 persons. On a similar basis, the number in 1924-25 had grown to 68,436, while the value of the products of these manufacturing industries increased during the same period from £20,500,000 to £48,250,000. NOT HOSTILE TO EMPIRE TRADE. : There is, unfortunately, in . New Zealand a body of opinion which regards Dominion manufacture as distinctly hostile to the principle of Empire trade. In effect, however, Dominion manufacture for local use is Empire Trade in its very best form: both buyers and sellers are Britishers living in close proximity and not, as is the case with external trade, separated by many thousands of miles. The objection too is sometimes raised that local manufacture, by reducing the sale of British goods, ?s detrimentally affecting the purchasing power of the United Kingdom, and that as trade is mutual we cannot sell our exportable products to advantage if we refrain from buying. This contention overlooks the fact that a manufacturing population provides a local instead of a distant market for primary products; increases rather than reduces our national purchasing power, and viewed broadly must, as already suggested, benefit and not injure the large scale and specialised industries of Great Britain.

PRODUCTION AND WEALTH.

It is a remarkable feature of all discussions on the economic welfare of the Dominion that consideration is given

dxtTflßlVely to matters affecting our external trade. This arises no doubt from the fact that statistical information regarding imports and exports is readily obtainable, while figures showing the extent and value of internal trade cannot be given. While it is certainly true that New Zealand's welfare is based to a large extent upon external trade, this is probably to be regarded as a weakness rather than an indication of national strength. The all-important consideraI tion is the value of our total production, and our surplus of wealth and our total purchasing power is dependent upon that factor irrespective' of whether the goods be produced for export or for local consumption. The advantages of a "well-developed trade within the Empire might be stated in brief as representing the benefits arising from the encouragement of Empire production. Dominion manufacture takes its place in that production as a feature of increasing importance. Production in general is dependent upon the existence of markets satisfactory to the producing interests, and if the consumptive demand of British countries can be directed towards British goods, production within the Empire must benefit, and the material welfare and strength of the British Commonwealth must be enhanced..