MR. NASH EXPLAINS

Hawke's Bay Herald-Tribune, Volume 81, Issue 11, 6 October 1937, Page 3

MR. NASH EXPLAINS

Telesraph— lJreas 'Association.J

Re-entry of Dominion Fruit and Butter PAYMENT ARRANGEMENT

(By

j-- MELLINGTON, Last Night. When the House resiuned tonight a series of Customs resolutions and a Bill were Introduced ratifying the trade agreeiuent and payments agreement between thls Dominion and Germany. It was explained by Hon. Walter Nash that the primary object of the agreement which was signed on September 30 by Mr Savage and Dr Hellenthal, Consul for Germany in New Zealand, was to gain admission into Germany for those New Zealand products for which there was a fuarket in Germany, particularly butter and fruit, but which, during recent years, had been precluded from entry into that country owing to the restrictions imposed on the use of foreign exchange. Mr Nash outlined the figures of trade between New Zealand and Germany over the last eight years and for the first six months of this year. Germany, said-Mr Nash, was a large importer of butter, the figure in 1936 Teaching over 75,000 tons, imported principally from Denmark, Sweden and the Netherlands." She was also a large consumer of imported apples, over 121,000 tons being imported in 1936, Italy, France and the United States being the main suppliers. He added that under the payments agreement (which was ancillary to the trade agreement) Germany undertakes to make available for the purchase of New Zealand products the full ainount of foreign exchange accruing to Germany from exports to New Zealand. In this respect the agreement is along the lines of that concluded last year between Canada and Germany. An ariaugcmcnt aho been rnade Under which Germany undertakes to allocate a considerable portion of such credits for the purchase of New Zealand butter and apples. The amount so allocated will be based on a percentage of the credit's accruing to Germany from exports to New Zealand during the preceding year. ia respect of butter, thfc purchases shall amount to 25 pcr ccnt. of such credits up to £400,000 sterling, plus 50 per cent. of the credits in excess of that figure. In respect of apples the allocations shall represent 5 per cent. of the credits up to £400,000 sterling plus 20 per cent. of the credits in excess of that figure, with a inaximum purchase of apples from New Zealand in any one year of £60,000 sterling. An important provision of the payments agreement is the requirement that the existing procedure of " Aski" accounts through which export trade has been carried out with that country j shall be immediately terminated. This | means that in i'uture trade between j New Zealand and Germany will be con- j cluded through ordinary commercial channels. The payments agreement comes into force on January 1, 1938, and is binding for two years, but uniess notice of termination has previously been given it is to continue in force thereafter, subjeet to three months' notice of withdrawal by either party. The trade agreement provides for the extension by each party of the most-favoured-nation treatment to goods of other classes. Special provision is made for safeguards against dumping by Germany where New Zealand industries or preferences accordsd to British countries are adversely affiected. Provision is also made for the grahting by New Zealand of concessions in Customs duty to certain classes of German goods, the list of which is as follows: — Goods, Wine and other kinds: Present duties British preferential tariff 4s per gallon, general tariff 6s per gallon; proposed duty on German goods, 4s per gallon plus 20 per cent. or 6s per gallon whichever is lower. Brugs and chemieals, n.c.L: 20 per cent., 45 per cent., 40 per cent. Braids and binding., n.e.i.: 20 per cent., 45 per cent., 40 per cent. Lenses, all hinds: Pree, 20 per cent., 20 per cent. Artists' materials: Pree, 20 per cent., 20 per cent. Camera cases: 20 per cent., 60 per cent., 40 per cent. Clocks: 20 per cent., 45 per cent,, 40 per cent. Pianos, organs and similar: Free, 45 per cent., 25 per cent. Musical instruments, n.e.i.: Pree, 45 per cent., 25 per cent. Cameras: 20 per cent., 45 per cent., 40 per cent. Photogruphic goods, n.e.i.: 50 per , ceut.j 45 per cent., 40 per cent. Emery paper: Pree, 25 per cent., 20 per cent. Paperhangings: Pree, 25 per cent., 25 per cent. . Engines, viz. (1) speeially suited for eycles: 10 per cent., 40 per cent., 30 per cent. Artifieers' tools, n.e.i.: Pree, 25 per cent., 25 per ccnt. Field glasses: 20 per cent., 45 jier cent., 40 i>er cent. Builders' liardware: Pree, 45 per cent. 25 per cent. js.aisomiue and distempers in powdcr ,'unn: Pree, 35 per ccnt.; 25 per cent. German goods of tho classes mention ed will be exempt from the surtax of OAOths of the duty payable in respect of guuA tiable to the general tariff. In special eonsideration the items iu

•pect of which concessions eould be' made care has been .taken, said Mr. Nash, to avoid conflict with the New Zealand industries. The preferential tnargins had also been maintained in accordance with the Ottawa agreement. Any increase in the purchases of Gertnan goods by New Zealand will immediEtely be reflected in the increase 4 purs hases of New Zealand products by [Germany and there was good reason to lanticipate that the agreement will jprove to the benefit of this Dominion, j Mr. Nash added that he had secured the British authorities' sanction for the agreement and they were anxious to see other agreements of that tyjfe concluded. Under the agreement Gerftany would buy New Zealand butter at a price on a parity with that ruling for Dur butter on the London market at the lime of .the purchase and Germany was to go on the market during three months of the year when New Zealand supplies were in major quantity there. The position was not quite the same at regards fruit, but the German Government would issue certificates to theit dealers for this commodity. Mr, Coates asked when the agreement would come into effect. Mr. Nash: On Tuesday of nest w"8ek. Mr. Coates: It has been reported to me that after the agreement becomes effective German invoices in reichsmarks will be converted into pounds sterling at. the rate of 20.46 to the £2' sterling. Mr. Nash: The honourable gentleman apparently knows more about the agreement than I do. Mr. Coates: A number of businessi men have asked me if reichsmarks will | be valued at 20.46 to the £1 sterling comply for the purposes of buying and duty. If, for instance, 12.40 is the 1 basis upon which thefduty is levied British exporters will be definitely at a ! disadvantage compared with importers | from Germany bn the basis of 20.46. j Mr. Coates w/mt on .to say there waa j nothing to prevent other foreign nations . being ineluded on the basis arranged [ and he asked if the British 20 per cent. preference provided under the Ottawa agreement would be affected. Mr.- Nash stated that it was hardly possible to answer Mr. Coates' question. There was nothing in the agreement regarding the value of the xeichsmark. They had agreed to look into the correet value of the reichsmark as compared with the New Zealand pound. There was no commitment whatever. He was astonished at Mr. Coates' sugges- , tion. Nothing would interfere with the 20 per cent. preference to British goods. Mr. C. A. Wilkinson asked if Mr. Nash had tried to get a trade agteement with Prance. There was a Scar city of meat. in Prance, he added. Mr. W. A. Bodkin contended that the agreement was definitely in favour oi Germany and that Germany would buy our butter when it was at its cheapest rate on the London maruet. Mr. W. J. Polson expressed the feai that the agreement with Germany might tend to misplaee our butter inarkets in England. Mr. Nash stated that he had visited France and discussed the possibiiities oi a trade agreement with that country. We had not sold a pound of butter to Germany for the past three years. He ieiterated that the proposed agreement provided that 25 per cent. of the first £400,000 should be spent by Germany on butter and dealt at length with the Opposition's contention that the agreement made for the aiversion of trade and not expansion of it. World trade had incroased by 20 per cent. and the Government was aiming to expand the volume of trade both in Germany and New Zealand. Mr. S. G. Holland said the concern of the Opposition was to see that the agreement did not have any ill effect on Britain. Hon. B. Semple: An assurance to that effect has been given a dozen times. • Mr. Coates contended that the agreement would mean the purchase of German goods at the expense of the British mamifacturer. As to the purchase of butter the agreement was all to the good. It might mean increased production or it might not do so. Mr. Nash stated that trade with Britain would not be affected in any way. The British authorities had been consuited coneerning the agreement and had given it their full approval. Mr. Polson said tne Opposition wai always seoking to expand trade bul not at the expense of Great Britain. Ii New Zealand bought German goods shi was not giving her own manufacturers an opportunity of expanding their out put. The proposed agreement requirec mueh closer scrutiny that it could bt given that evening, having been sprung upon them without warning. Mr. H. A. Atmore contended that under the present ridiculous monetary system the Minister of Finance wai entitled to sell onr produce to any purchaser offering. Mr. W. P. Endean asked if German or British shipping would carry trade between Germany and New Zealand. Mr. A. S. R'ichards said the Opposition would not dare to vote againsl the agreement beeause it nieant; an extended market for our dairy products It was the best agreement that had ever been made in this connection. Mr. Coates retortei that in all his experience in the House he could nol remember a Customs xesolution being voted against. The Government was entitled to its resolutions, but when the Bill itself came before the House ii would be a different matter. At 11.15 the Customs resolutioi making provision for the alterations ii the duties necessitated by the agree ment was carried and tho Trade Agreement between New Zealand and Germany Batification Bill was introduced by Governor's message and read a first time. The Minister of Finance announeed that the second reading of tho Bill would take place at 2.20 to-mqrrow and tlie House rose at 11.30,