The Evening Star THURSDAY, SEPTEMBER 15, 1927. PREFERENTIAL TARIFF ASPECTS.

Evening Star, Issue 19662, 15 September 1927, Page 6

The Evening Star THURSDAY, SEPTEMBER 15, 1927. PREFERENTIAL TARIFF ASPECTS.

Communis on tho new Customs tariff continue for tho most part to bo uncomplimentary The tew cases in which praise is bestowed arc on the ground of increased pro lore nco to goods of British origin. The British Trade Commissioner m ‘New Zealand naturally declares this to bo a sound tariff revision. Representatives of chambers of commerce express warm appreciation of tho underlying principle of encouraging still further trade in goods produced within tho Empire. On occasions sucli as this importers arc good patriots. But local manufacturers arc asking very pointedly whether patriotism, liko charity, should not begin at home. Thus Air Campbell, president oi tho Wellington Manufacturers’ Association, says that this is a good tariff for the British manufacturer, as wherever possible a substantial advantage has been given him; but had tho same preference been given the New Zealand manufacturers, a stop forward in tho secondary industries would have been certain. Similarly Mr Hogg, an ex-presi-dent of the Dunedin Manufacturers’ Association, declares that evidently tho policy of the Government is to aim at switching over a large percentage of tho foreign importations into Empire channels; and while this object is to be commended, it is unreasonable to suppose that this is practically the solo object of a. tariff, yet no attempt has liccn made to assist the people ol the dominion to foster our own industries and provide for further employment and prosperity within Now Zealand.

This was one of the avowed objects of tile Government in its tariff revision, but it came only third in tho list ot the live guiding principles enunciated hy Mr Downio Stewart when introducing tho resolutions in Parliament on Tuesday. The first principle was a reduction of tho cost of livriig and of the cost of production in both primary and secondary industries. Thu general opinion mi far is that in these directions very little indeed will bo achieved. The second announced objective was the assistance of local industries. Almost complete disappointment lias been expressed by those in need of such assistance. Tho third objective, “to encourage still further trade in goods produced in tho British Empire, instead of in those of foreign origin,” is in the view of all interests, many of them of a conflicting nature, likely to ho achieved. But its achievement certainly appears ilkely to be in some measure destructive of objectives No. 1 and No. 2. Those in the importing trade have repeatedly declared that the instant result of granting preference to the British manufacturer is that 'ho puts up the price of his goods to a level at which ho can just undersell the more heavily penalised foreign competitor. Thus in every case, except where local manufacture compotes also, further preference increases the cost of living in Now Zealand. It would appear that in a general way the increased preference is likely to make British Empire goods the chief, if not the only, competitors of local manufacturers, and tho outcry of the latter about the new tariff amounts to a complaint that Imperial preference of the degree brought forward works to the detriment of local secondary industry. Excessive attention to ouo objective seems to be the chief reason for the lopsided nature of the new tariff and for the hostile reception it is, being accorded by so many sections of tho community.

The fact appears to bo that llio overseas dominions arc giving preference lo the British manufacturer which the British Government denies him in his own country. For example, under this now tariff the duty on much machinery of foreign origin is doubled—a rise from 10 per cent, ad valorem to 20 per cent.—while British-made machinery continues to have entry here duty free. Yet this foreign machinery can and does enter Britain duty free. In an important and expensive section of such machinery a considerable amount goes from America into Britain against the product of old-estab-lished British firms. New Zealand may follow Britain’s precept, but certainly not her example, in taxing the American article; yet New Zealand appears to follow Britain’s example in giving the minimum of protection to her own local industry. However, it is inevitable that some queer complications and contradictions must occur in trade when the overseas dominions seek to give effect to preferential trade while Britain maintains a freetrado policy. Ami since Britain declares herself unable to grant preferential treatment to the

products she imports from her dominions it is evident that the New Zealand Government contemplates seeking other markets than Britain for portion of our exports. The disappearance of the intermediate tariff, together with tho frequency of increases in tho general tariff, suggests that our Government is keenly on the look-out for reciprocal trade agreements with oilier countries —in fact, Mr Downio Stewart has .specifically stated that by such means ho hopes to remove the unequal balance of trade between New Zealand and certain other countries. Presumably he has America chiefly in mind. But already, without any reciprocal agreement, ho has in this tariff made a

concession to America, to which wo referred yesterday, for which no corresponding American tariff concession has been made to New Zealand. And unfortunately the nsult of it will do far more harm to local industry as a. whole than all the good this tariff is likely to do in the way of stimulating tho rest of our local industries. This matter remains inexplicable.