NEW CRISIS

Evening Post, Volume CXVIII, Issue 90, 13 October 1934, Page 9

NEW CRISIS

AUSTRALIAN TEADE

BELGIUM'S DEMAND

OVERSEAS TREATIES

(From "The Post's" Representative.) SYDNEY, Octob.er 6.

Trade .problems of extraordinary difficulty will face the now Federal Cabinet as soon as it settles down to business again, for it must' consider the demand for treaties that are being made by various foreign countries with which Australia in the past has had a favourable balance. Australia already faces serious trouble in this regard, for it must bo careful not to offend Britain, and desires to adhere rigidly to the terms of'the Ottawa Agreement. On all hands the. primary producers are threatened, and already their position is precarious enough. The formation of a Coalition Government, in which the Country Party will'have representation, will not make it any easier, for the Country Party is all in favour of treaties that would help the man on the land before all others. The conflict between primary and secondary interests is bound to grow, and it will be difficult to balance- the scales. The latest threat comes from Belgium—a threat of an embargo on Australian cereals unless there is a trade agreement providing for the admission of Belgian glass to Australia. The exports of barley—mainly from South Australia—to Belgium during recent [years have been: 1930-31, £229,655; 1931-32, £316,819; 1932-33, £193,817. The loss of this trade would be a very serious blow. When tho Government considers this position it will find itself in an unpleasant dilemma. If it decides to maintain existing restrictions and duties upon foreign and British glass, the Belgian embargo affecting Australian wheat and barley will operate. If it removes the restrictions it will .be- charged with failing to safeguard Aus^alian industry. In some quarters it is being asked: Has Belgium forgotten the way in which Australia went to her assistance during the Great War? Just twenty years ago, it is pointed out, Australia thrilled to tho slogan "Remember Belgium," and the Belgian -people were deeply touched with the Australian money that flowed their way in hun-. dreds of thousands of pounds. Now that the sword has been tossed aside comes Belgium's ultimatum, as mandatory in the world of commerce as the order to clear the road at Namur was mandatory in the world of arms. ITALIAN TRADE POSITION. The trade position with Italy is almost as critical as with Belgium. Italy now subjects foreign products, including wool, to a' licensing system, and in issuing licences for the admission of individual consignments, regard is paid to the trade position with the country of origin. Italy has a large adverse trade balance with Australia. She is an importer of Australian wool, and she wishes to have the existing adverse trade balance reduced. That can be done only by increased Australian purchases cf Italian goods or by reduced Italian purchases of Australian goods. If the Government frames a trade treaty making it possible, for Australia to buy more Italian goods the interests of local and British manufacturers will be menaced. Italy, for instance, has demanded the free admission of artificial silk yarn, but under the Ottawa Agreement Australia must give the United Kingdom producers a preference of 15 per cent, ad valorem over Italy. It was stated by the Minister of Customs recently that Italy had decided to reduce imports of Australian wool by half from August 1, the reduction representing about 100,000 bales, worth between £2,000,000 and £3,000,000. In the case of Jtaly and Belgium demands have been made that conflict with the rights of Britain under the Ottawa Agreement, and a request has been made to Britain to waive some of those, rights.

British manufacturers are opposed to any such proposition, claiming that they havo a prior right to the Australian market. The principal difficulty confronting the Australian Government in considering the overseas trade position arises 'from the fact that Australia has huge favourable trade balances with all the important purchasing countries except the United States, and adverse trade balances only with those of small purchasing power, again excepting the United States. This means that Australia can make trade agreements satisfactory to the purchasers of her goods only by purchasing more of their products. .Trade.agreements on these lines must bring the goods of the foreign countries concerned into close competition with British and Australian manufacturers. It would appear that political considerations make this course difficult, if not altogether impracticable.