TRADE OUTLOOK

Waikato Times, Volume 122, Issue 20509, 27 May 1938, Page 6

TRADE OUTLOOK

The President of the Board of Trade, speaking in the House of Commons on Tuesday, reviewed economic conditions during the past year. The trade of the Mother Country, it was shown, had been satisfactory, and the fact that there was an apparent adverse balance of £52,000,000 will cause no concern. The invisible exports would more than account for that margin, and, in any ease, a very large proportion of the imports was in the form of raw materials needed for industrial purposes. There was another factor which had helped to swell the value of imports, namely, the increase in rulin" prices. That 'must have been of immediate benefit to the producing countries, providing them with credits which in turn will enable them to increase purchases and generally easing internal monetary conditions. The experts appear to be agreed that the most hopeful sign of recovery would be a development that would assist countries producing raw materials. The progress made last year has not been continued in the current period, possibly due to the recession in the United States. That, in view of the experience of 1929, probably has created fears that the movement might spread, and for a while at least world trade has slackened. It is not generally realised to what extent the industrial production of the United States has fqflen. A recent report issued by the Information Section of the League of Nations, states that early in 1938 production there was only two-thirds of what it was at the beginning of last year, the fall in what are called investment goods being 60 per cent, since August, 1937. This adverse movement has been reflected in prices ruling for industrial shares, and they have fallen in most countries. Last February the fall of industrial share levels in the United States, when compared with that for the corresponding period of 1937, was 37 per cent., in Belgium 30, France 26 and in Great Britain 22 per cent. The British Minister apparently holds that the first big step towards an improvement must be a trade agreement with the United States. Representatives of the two countries have been negotiating in Washington for some time, aad the latest reports in Home papers were to the effect that the agreement might be more limited in scope than was at first anticipated. It is the intention to maintain the policy of bilateral agreements with other countries and as the British markets are of such vital importance to many of them they should be willing to make concessions in order to secure trading privileges. The leading economic journals at Home hold that there is little possibility of the recent dip in world trade leading to another prolonged depression, and full allowance must be made for the unrest in the international sphere. Trade cannot function efficiently when political relations are severely strained. What is needed —and it cannot be too long—is a period of goodwill. Conditions in Europe have been such that businessmen cannot have felt confident in extending their commitments, and a lack of confidence has had adverse effects in the great markets of the United States. The fact that last year, despite the conditions ruling, British exports showed an increase was an encouraging sign, and the Dominion is directly concerned in the maintenance of price levels overseas. If any further crises can be avoided on the Continent, and at least some of the barriers to world trade removed, the outlook, now a little darkened, should quickly become brighter.