OTTAWA AGREEMENT

Rotorua Morning Post, Volume 2, Issue 354, 15 October 1932, Page 4

OTTAWA AGREEMENT

With the exception of the schedules accompanying the proposed tariff changes, and the terms of the meat agreement, Mr. Coates' Ottawa statement did little more than enlarge upon matters whieh had already been indicated and outlined. It is apparent that the test of the agreement has still to be made and that it cannot be accurately gauged until the proposed tariff revision is carried out and the new duties come into operation. Mr. Coates has, however, given a definite undertaking that New Zealand will carry out a complete tariff revision with the ob- ! | jeet of placing the British exSporter on a "fairer competitive llevel." This, in itself, is one of I the most valuable achievements ! of the conference so far as New ; Zealand is concerned. The neces1 sity for an overhaul of the exist- | ing tariff schedules has become ! more apparent each year and | now that this overhaul has been j made one of the conditions of ! an inter-Imperial agreement, { there is reasonable hope that it | will be speedily carried out. Alj though time alone will determine ! the value of the majority of the concessions, Mr. Coates appears justly to have stressed the fact ! that New Zealand has made no disproportionate saerifices. It is true that the removal of the surtax and primage duty, together with the revision of the customs schedules, will give substantial benefits to the British manufacturer, but there appears to be no ground for the somewhat premature and hysterical contention that this was being done hy sacrificing the Dominion's secondary industries. It is true that Mr. Coates was vague in his indication of the tests to which our i secondary industri'es are to be ' subjected in order to determine ; their right to protection, but we cannot perceive anything in the present tariff reductions proposed which is likely materially to affect them. The proposed comprehensive tariff revision, however. will larerelv determine this

aspect of the position and until it is carried out, no definite conclusions can be formed. The success or otherwise of the meat agreement is similarly a matter for future determination. It is contended that a system of regulating supplies in favour of the New Zealand exporter will improve prices. It should undoubtedly increase* the volume of pieat exported, but this does not necessarily imply an increase in price. This is a matter, which in the final eveiit must be determined by the consumer. Unless the demand substantially increases in the aggregate, any increase in price to the exporter, must in the long run, be paid by the consumer. It is doubtful whether, in these circumstances, the British taxpayer will regard any extra contribution he is asked to make with equanimity. If the result of the Ottawa meat agreement is an increase in the cost of the British breakfast-table, the reactions are more likely to be unfavourable than otherwise. On the other hand, however, there appear to be reasonable prospects of so regulating the supplies that the Dominion will secure a substantial benefit from the additional aihourit exported without increasing the price to the consumer. New Zealand's cdncessions on the f our classes included in the reduced customs schedule, on past figures, will niake a contribution of appfoxi-

mately £300,000 per annum. It is true that this amount will be a direct loss to revenue, but as Mr. Coates pointed out, a portion of this contribution will be returned in reductions passed on to the consumer. For present purposes, however, New Zealand has offered a contribution of something over £800,000 per annum from revenue, and the caneellation of primage duties, in addition to a promise of further reductions and encouragement of British imports, in return for the meat agreement and a number of definite and valuable concessions in regard to export commodities. The bargain has still to prove itself, but there appears to be justifieation for the satisfaction which Mr. Coates expressed when referring to the agreement. Its success so far as New Zealand is concerned, very largely depends upon the thoroughness of the" tariff overhaul, the efffcient safeguarding of profitable secondary industries, and a judicious management of the system of meat export cohtrol. .