FOREIGN TRADE

Hokitika Guardian, 9 January 1930, Page 7

FOREIGN TRADE

AN AMERICAN VIEW. NEW YORK, Nov. 22. Import am! export tiade in eommodiiie.-, depends on many complex factors. Smiie of tiie more important are prices, foieign loans, gold holdings and international movements thereof, im-. portant tariffs, ipudity and reputation o, goods. Regarding prices, importers of course buy m the cheapest market. The United States is now a. relatively highinked market. England and Germany, whef& money is sea rest, will afford the big buying markets, and trade in cei> tain lines will tend to gravitate towards them.

Foieign lending gives the borrowers purchasing power, a part of which is ordinarily spent in the leading country. Our foreign loans have been at a low ebb for the last year. Easier money points towards their ultimate resumption, hut conditions have not stabilised sufficiently to allow immediate large stale foreign flotations here, and it is not likely that we shall in tne measurable future reach the 1928 volume of foreign investment. This situation is already affecting our exports adversely, and will continue to uo so for some time.

Countries in a position to export gold can obviously purchase more goods than those where gold is scarce. The tnited States lias relatively large stocks of gold, some of which is starting to flow out. This will tend to support our imports, though the major portion of withdrawals represents foreign capital going back home, and does not affect the foreign trade. Low tariffs stimulate foreign trade, as larger imports usually mean larger exports. The United States as a high tariff country—with an upward revision of rates in process—is to this extent restricting its foreign trade. Quality and reputation of goods often give certain countries a sort of monopoly. This applies to some of of our motor cars, machinery, finished steel products, etc. This situation is, however, being modified by establishment oi foreign branches by some of our industrial concerns.

Summing up, it appears that our foreign trade has passed its peak for the time, that the rise' in the ratio of imports to exports will continue, and that Germany and England will gain at our expense in some markets.