A HEAVY BLOW

Waikato Times, Volume 119, Issue 19894, 25 May 1936, Page 4

A HEAVY BLOW

The action of the United States Administration in imposing additional duties on imports of cotton goods will be a heavy blow to one important section of Japanese industry, and may have a disturbing effect in many markets. The loss of the trade with the United States will make it essential for the Japanese firms to find other avenues for the disposal of their manufactures, with intensified competition right along the line. The Japanese Government resented the action of the Canadians some time ago in imposing a duty to counter the depreciation of the yen, and took steps to exclude Canadian products, but it remains to be seen whether they will adopt a similar course regarding the United States. They may seek for alternative supplies of raw cotton, and negotiations are said to be in progress with Egypt. It may also be possible to increase supplies from India, now governed by an agreement under which Japan, in return for a limited market in India for manufactured cotton goods, takes a certain quantity of Indian cotton.‘ It seems strange that the country that produces the largest cotton crops should have to protect her domestic markets against the competition of outside manufacturers, but the standards of living in Japan and the United States differ to such an extent that Japan has been able to purchase American cotton, ship it acress the Pacific, manufacture goods and sell them in the United States at prices which the local manufacturers could never equal. lVithin a few hours two important countries had to report a failure to reach a trading agreement with Japan. Australia is to take steps that will limit the market there for Japanese cotton piecegoods. The result anticipated is a revival of trade with Luncashire, probably in the better quality lines, and that development will be welcomed at Home for the cotton trade has been severely hit by foreign competition in Empire markets. In the case of Australia Japan had already expressed an in~ tention to purchase South African wool, in preference to Australian, if an agreement were not reached, and Japanese competi—tion in the wool market of the Commonwealth has been an important factor. But the bulk of the wool purchased by the Japanese has been for domestic consumption while the cotton trade must have overseas markets. These additional cur‘tailments on the disposal of Japanese goods may prove a severe loss, for the country depends upon the marketing of its industrial products for its financial stability. Indeed, it has been stated that Japan must find larger markets or her industrial position will be threatened, and it is that aspect that makes the latest developments of importance.