Wairarapa Times-Age SATURDAY, AUGUST 6, 1938. AUSTRALIA GIVES A LEAD.

Wairarapa Times-Age, 6 August 1938, Page 4

Wairarapa Times-Age SATURDAY, AUGUST 6, 1938. AUSTRALIA GIVES A LEAD.

« UJARLY and brief reports of the trade discussions lately concluded by British and Australian, representatives in London gave some grounds for an impression that these discussions had ended in deadlock and failure. It was announced, for example, that the Australian trade delegation headed by Sir Earle Page had failed to secure a modification of the principles of the Ottawa Agreement which govern British trade with Australia. More detailed information has since shown, however, that the Australian delegation was by no means wasting its time in London and that the foundations at least have been laid of a newtrade agreement between Britain and Australia which may supersede the Ottawa Agreement. It seems more than likely that New Zealand may find it incumbent on her to follow the lead Australia has thus given. An interesting and important approach to a new system of trade regulation was made in proposals which are to be investigated by the Commonwealth Government after determining the lines of development of secondary industry in Australia. The Ottawa Agreement provides that protective duties on British goods entering the Dominions shall not exceed the level which will give United Kingdom producers full opportunities of reasonable competition on the basis of relative costs of economic and efficient production. Under the new system now to be investigated in Australia this formula would be supplanted by a schedule of maximum rates of duty. Although there are some special difficulties in arriving at fixed rates of protective duties, it is possible at least that Australia may thus approach a better understanding on the subject of British export trade than any of the Dominions has thus fax* reached with the Mother Country on the basis of the formula embodied in the Ottawa Agreement. , An impressive feature of the discussions was the readiness with which British Ministers recognised that Australia must expand! her secondary industries. One passage in the "White ' Paper reporting the discussions runs:— During the discussions, the United Kingdom recognised that a substantial increase in the Australian population could not be secured solely by the expansion of primary industries and that it was necessary to combine that expansion with the sound and progressive development of Australian secondary industries. The full significance of this declaration appears when it is considered that at least a. considerable proportion of the secondary industries Australia has developed or is developing would be undersold on their own market if they were exposed to the full force of British competition. Other proposals which were dealt, with in the discus 7 sions relate to co-operation in arriving at trade agreements with foreign countries. The broad impression conveyed by the "White Paper is that while Britain and Australia have made no immediately important change in their economic relationships, they have reached an excellent preliminary understanding in regard to future development—an understanding likely to stand them both in good stead. The position thus indicated plainly deserves practical attention in New Zealand. "We certainly should not grudge Australia any advantage she has gained in her trade discussions with Britain. On the other hand, considering that our purchases of British goods per head of population are considerably greater, and our duties 'on British goods considerably less, than those of the Commonwealth, we should be as little inclined to allow Australia to monopolise any advantages that are to be gained by a frank discussion with the United Kingdom of questions of trade and industrial development. There is nothing* Australia is entitled to ask of Britain that*we are not entitled to ask with at least equal confidence.

A COMPLICATED DISPUTE.

ACCORDING to the London “Times,” a study of prior events suggests that the Japanese took the initiative in the Changkufeng incident, which has developed so formidably during the last few days, by launching a serious offensive. It may still be a question, however, whether Russian guile has not had something to do with bringing about the existing state of affairs. In view of Japan’s present heavy commitments in China, it is difficult to believe that even her most ardent militarists desire to start a war with Russia. On the other hand it may suit Russia very well, as has been suggested in some quarters, to create a diversion in favour of China by compelling Japan to reinforce her already strong forces on the Korean and Manchukoan frontiers. The plainest evidence of intention on either side seems to be afforded, respectively, in Japan’s persistent overtures for a peaceful settlement of the incident and in Russia’s refusal 1o accept anything less than the evacuation by Japan of the disputed territory. The possibility of a diversion by which China, may benefit is the only feature of the affair that can be welcomed. Against that there is to be set the manifest danger of an outbreak and extension of hostilities on a serious scale which might spell calamity for the world at large.