EXCHANGE AND OTTAWA

Evening Post, Volume CXV, Issue 72, 27 March 1933, Page 6

EXCHANGE AND OTTAWA

CLEARING THE GBOTOD

REVIEWING THE TARIFF

IMPORTERS' VIEWS \

In a statement sent to "The Post," the Now. Zealand Importers' Federation notes with concern tho pretty quarrel which has developed between, the New Zealand manufacturers and the

primary producers,

"It is apparent that this quarrel would not have occurred if the agreement made at Ottawa had been strictly observed both in the spirit and letter by the New Zealand Government. The Ottawa Agreement is a comparatively simple ono. In exchange for substantial advantages granted by England to our primary products, Now Zealand agreed that duties on English manufactured goods coming into this market would be reduced by a percentage which would enable English manufacturers to compete on level terms with NeW Zealand manufacturers. Both the New Zealand manufacturers and the primary producers accepted that agreement, and the Government promised to set up a tariff board to take evidence and frame a tariff which would give effect to tho arrangement outlined above. Unfortunately, howover, the Government in January Inst suddenly decided to inflato exchange. The rato was raised from 10 per cent, to 25 per cent, and immediately the Ottawa Agreement was clouded. ■'■*, AN UNFAIR HANDICAP. | 'Exchange was inflated.to assist the primary producer in the face of strong opposition from the rest of the cbufmumty, but, apparently, the farmers' leaders are now uneasy. Thoy aro well awaro that Now Zealand's action-in inflating exchange cut across tho Ottawa Agreement, and has caused resentmont not only to tho English manufacturer but to tho English farmer, who is now forced to. compete with our primary products under an unfair handicap: The farmers' leaders now realise that the situation is a dangerous one, and aro urging that our-tariff should bo drastically reduced in order that the Ottawa Agreement be kept. The- position is almost comical. Do theso gentlemen •actually believe that the position will bo corrected by merely reducing duties on English manufactured goods? They must bo awaro that at present a great variety of goods required by farmers enter into this country free of duty. It is, therefore, impossiblo to right tho wrong which was inflicted on the English manufacturer of such goods through exehango inflation by reducing duties which do not-exist. On the other hand, if wo turn to the English manufacturer of goods which are dutiable, wo find his case is not much better, because, under the Agreement, tho duty on his goods would in all probability have been reduced oven if exchange had not been inflated. If tho duty is now reduced by a percentage equal to the percentage viso in exchange, such English manufacturer would find himself in exactly the same position as he was beforo Ottawa. In other words, .he would havo gained nothing, whereas our products arc already enjoying the advantages gained at Ottawa. " ' "DO THE RIGHT THING."

"The New Zealand Importers' .Federation insists that the r Government should do the right thing and immediaUl}' clear tho ground by removing all restrictions on exchange. Lot the exchange rate reach its normal level, and then let our tariff bo reviewed in order to. bring it into line with Ottawa. -

"The New Zealand manufacturers naturally fear that the present artificial exchange rate may be used as a weapon when the tariff is being reviewed and that duties on many articles may be too drastically reduced on that account, and that when the exchange rate falls, as it must before long by the weight of London balances, they will find themselves in a most unenviable position. The Importers' Federation agrees that the duties on a great many items coming into New Zealand are- far too high, but it sympathises with the fears of the manufacturers, and i urges that the Government should, in the first place, remove all restrictions from exchange, and, in the socoiul place, sot up the long-promised tariff board immediately."