The Evening Star MONDAY, JUNE 18, 1934. JAPAN RETALIATES.

Evening Star, Issue 21749, 18 June 1934, Page 8

The Evening Star MONDAY, JUNE 18, 1934. JAPAN RETALIATES.

Japan’s trade drive has taken her goods into far-flung parts of the British Empire, and the West Indies is one of them. A Japanese trade envoy is at present in Jamaica, but whether he is merely a commercial traveller or has authority to speak on behalf of the Government at Tokio is not yet apparent. However, he has been making some bellicose statements in the sphere of trade, threatening a Japanese boycott of Australian and Canadian raw materials because of the application of the quota system in respect of the Japanese textile trade .with the West Indies in particular, and discrimination against Japanese goods in British countries in general. Ho may not be speaking at random. It must not be overlooked that on May D ay a Safeguarding Act came into operation in Japan, and is to remain valid for three years. It is officially explained that the law has become necessary because there is'a growing tendency in other countries to ignore tho fundamental economic principle of ministering to one another’s wants, and promoting through co-operative efforts the progress and prosperity of mankind, by attempts to suppress the importation of foreign goods, and because an increasing number of countries are erecting barriers against Japanese exports. Tho law is intended to enabk Japan to adjust her trade to this situ ation and balance thereby her international payments, and to take, if necessary, measures to safeguard her commerce. Such measures include raising or lowering tariffs and pro-

hibiting or restricting the import of specified articles during a specified period; but it is added that Japan hopes that it will not be necccssary to make the law operative. Meanwhile it is worth noting that in most markets where Japan is striving to find fresh outlets for her products she is at the same time endeavouring to make reciprocal purchases. Within a week of the first operation of Japan’s Safeguarding Act Mr Walter Runcimau, in the House of Commons, announced the policy of the British Government in the matter of Japanese competition, particularly in colonial markets. Since the failure of the representatives of the textile industries of Japan and Britain to come to an understanding a determined effort had be.en made by the British Government to secure some kind of agreement with the Japanese Government, said the Minister, but this effort had come to nothing, and Ministers had been forced to the conclusion that Japan has been merely playing for time while continuing to expand her exports to British markets to the serious detriment of Lancashire. For this reason Cabinet had decided that action could be no longer delayed, and that the trade of Britain must be safeguarded. • There has been in existence for twenty years an Anglo-Japanese commercial treaty, and this is not to be denounced by Britain. Neither, it is claimed, does the British Government’s proposed course of action infringe the most-favoured-nation principle, as no discrimination against Japan is involved. At present, said Mr Runcimau, cotton and rayon goods only are in question, but competition in other goods will be dealt with ijjffthe colonies after further as to the best means to adopt, and in Great Britain by the Import Duties Act. In the case of the United Kingdom market the Import Duties Advisory Committee has been asked to complete its report on the silk duties as soon as possible. In the case of the colonial markets the Governments of the colonies and protectorat ; for which such action would bo appropriate have been asked to introduce import quotas which, except in the case of West Africa, would apply to all foreign imports of cotton and rayon goods. In the case of West Africa action will be limited to Japanese goods. The quota is to be based on the average imports of the various foreign countries in the years 1927 to 1931, and the reason for selecting this period is not hard to find. The average import of Japanese cotton piece-goods into the colonies in those years was 87,673,000 square yards. In 1932 the figure jumped to no less than 200,020.000 square yards, and there was a further substantial increase in 1933, though the full figures are not yet available. On the other side of the picture • exports from Lancashire to the colonial markets dropped from 307,000,000 square yards in 1932 to 191,500,000 square yards in 1933.

There have been some interesting contributions in England to the long-con-tinuing discussion there on the menace of Japanese competition. Sir Harry M'Gowan, recently returned from a visit to Japan, deprecated rushing the Government into precipitate action on the question of Japanese competition, and ho urged that the most hopeful immediate remedy was a rapprochement between industrialists in Great Britain and Japan. Many British industries needed reorganisation, and there was equal necessity for a planned programme for industry generally over a period of years. Similarly he felt much could be done to lower manufacturing costs, and he insisted that price and not quality was the acid test to-day. Sir Harry pointed out that during his visit to Japan he saw no signs of malnutrition among the workers, who seemed to be happy, contented, and of good physique despite their lower standard of living and their longer working hours. He ended with a note of warning that the imposition of any Government embargo might lead to Japan over-running British markets in the East. The viewpoint of Lancashire was thus put by one of its leading industrialists: “Japanese competition was founded upon conditions so different from those obtaining in the West that normal considerations did not apply: the price margins between Japanese and British products could not be bridged by any technical reorganisation or by any wage reductions which could possibly bo imposed on the workpeople of this country.’’ A question being discussed in Britain was the likelihood of Japan’s costs rising to anything like those of Lancashire. Mr E. W. James, chairman of the Kobe and Osaka Foreign Chamber of Commerce, does not entirely endorse the widely accepted view that Japanese costs of production will Jong remain substantially below those ruling in Europe. The Japanese manufacturers, ho says, besides paying more dearly for their imported raw materials—as to which there can be no question—are also faced with heavier taxation and a rise in the wage level. On this last point, however, there is a diversity of testimony. Some observers declare that the Japanese arc so easily satisfied that, despite any increase in wage or salary, they will remain content with a simple diet of rice and fish, merely buying a better quality and eating off a better dish. In such circumstances no material advance in the cost of living or wage level and no approximation to European standards would be likely, at any rate in the near future. Japan’s industrialisation has been so rapid that possibly there lias not been time for her mill workers to revise their previous very simple standards of living. But even if such revision comes about, what is to happen to the older industrial countries in the meantime? The amount of support which the self-governing countries of the Empire will give Britain in this matter of purchases from Japan has been left for them to decide. If Japanese buying support were withdrawn from the Australian and New Zealand wool sales wool growers’ pockets would certainly suffer. Japan’s alternative markets would be South America and South Africa, and in the coming season the latter’s clip would be far less negligible than last season, for South Africa has made a wonderful recovery from a terrible drought. With its great

gold output and its political stability since tbo Hertzog-Smuts fusion, together with totally changed pastoral prospects, South Africa is perhaps the most buoyant part of tbo world to-day. Mr Latham’s report to the Australian Government after his “ good-will ” mission to Japan ought to be a most interesting document in view of latest developments.