Swiss Watch Makers Face Trade Crisis

Sun (Auckland), Volume III, Issue 928, 22 March 1930, Page 5

Swiss Watch Makers Face Trade Crisis

There is something of a crisis in Switzerland’s watchmaking industry. Exports during the last several months have declined to a considerable extent, giving alarming indications of a further decline yet more : vapid. While a part of the blame is laid to Japan, certain industrialists are endeavouring to censure the United States, notwithstanding the fact that the Swiss trade campaigns of 1928 and much of 1929 in America . brought a marked degree of pros- * peritv to Switzerland. The causes are both political and commercial in character. 1 Swiss trading operations with America during most of the last two years were undertaken in an effort : to discount, as far as possible, the , dreaded increase of the American tariff on Swiss watches. Manufacturers here admit having feared such j contingency. The aim of manufac- j turers was to export into the United j States as heavily as possible, and to j get their goods across before Con- j gress undertook its announced re- j shaping of the tariff. America has been a fertile field for i the Swiss; it received and absorbed more than half of their annual export of watches. Naturally, they argued, their best course, after the last election, was to increase their production and hurry its exportation and sales before the setting off of a new American tariff barrage. The case of Japan is different. Japan, it appears, formerly was one of the heaviest buyers of Swiss watches, but has lately become merely a heavy purchaser of Swiss watch parts. These parts are nowadays assembled in Tokyo, according to the Swiss, and then marketed as either a Japanese, or even as a Swiss product. Two lines of objection have been developed by the Swiss. The first of these contentions is that it is bad business to base export sales on component parts alone. The second is that it gives the assembler, using, in this case, cheap labour in putting the parts together, an advantage which the Swiss manufacturer himself lacks I when it comes to launching his product on the world market. Accordingly, an" attempt is to be made to curtail the shipment of these parts to Japan and other assembling countries, just as shipment of another sort has already been curtailed, to a certain extent, in regard to the United States. It is hoped that there may thus be achieved a reduction to the lowest quantities by international economic needs as* opposed to cut-throat competition, which, in the end, would be bound to work to the Swiss industry. Toward injury to the Swiss industry another nefarious system is now claimed to be observed by Swiss watchmakers. This is inherent in the competition of American distributors of cheap Swiss wach movements. The distributors, it is asserted, have succeeded in passing their wares, to a disastrous extent., through the American tariff barrier as “bon-bon boxes.” The Swiss Watchmakers’ Association declares that it has evidence to support its contention of a heavy tariff of this sort.