H.—44.

The 40-per-cent. increase shown in the value of exports as between the years 1926 and 1927 is both satisfactory and encouraging, but the balance of trade is still a long way in Canada's favour. Dealing with particular lines of export during the above periods, the following table exemplifies the growth of trade in particular items :— 1925. 1926. 1927. £ £ £ Butter .. .. .. .. 180,546 147,094 344,145 Sausage-casings .. .. .. 219,699 249,249 337,420 Wool'.. .. .. .. .. 52,630 105,610 235,633 Cattle-hides .. .. .. .. 29,085 33,026 35,539 Grass-seed .. .. .. .. 3,984 5,538 5,264 Calf-skins .. .. .. .. 12,732 20,654 26,640 The Department is of the opinion that the trade with Canada can be increased, provided that reliable information as to market quotations and transport charges could be readily given. Already a good deal has been done in extending markets in New Zealand products in the thickly populated areas of eastern Canada. It is considered that an increased demand can be created for wool, casein, rabbit-skins, flax, fruit, dried fruits, and certain manufactured woollens, such as rugs and blankets. Samples of casein, toheroa-soup, and one thousand cases of apples (five varieties) have been sent forward to test the markets of eastern Canada, whilst some of the New Zealand woollen companies have appointed representatives to negotiate for sales of several lines. With the excellent regular shipping facilities provided to both the Pacific coast and eastern seaports, this valuable potential market for New Zealand's products should be fostered. The seasons being opposite is also an important advantage to New Zealand. This Dominion has earned a valuable goodwill in the past trading with Canada, but unfortunately our capacity to cater for some of Canada's needs (at present imported from foreign countries) is not widely known in the northern Dominion. The statistics of our trade with Great Britain shown at the Toronto Exhibition have done much to educate the Canadians as to the productiveness of our Dominion, and has given them a new realization as to our ability to supply quality goods. Island Trade. Tonga. New Zealand maintained during 1926 its position as chief seller to the Kingdom of Tonga. The total imports of these islands, however, fell from £258,000 in 1925 to £228,000 in 1926. New Zealand's portion of the 1925 trade was £95,000, and of the 1926 trade £71,000, a drop of £24,000. The United Kingdom increased its trade from £38,000 in 1925 to £48,000 in 1926, despite the falling-ofi of £30,000 in total imports. It appears as though there were more direct shipments from the United Kingdom last year, and this reduced transhipments through the Dominion. The exports of the Tonga Group amounted to £290,000 in 1925, and £263,000 in 1926. Of the latter, £255,000 is represented by copra, which generally accounts for over 95 per cent, of the total exports of this group of islands. Fiji. New Zealand continues to do a substantial share of the total trade of Fiji, but by far the greater proportion is represented by imports (mainly raw sugar) from that country. The imports into New Zealand for the year ended the 31st December, 1926, amounted to £710,476, and the exports to Fiji £142,225, the total trade being £852,701, or 26-47 per cent, of the whole external trade of Fiji. The imports by Fiji from New Zealand during the past five years have increased substantially, as is shown by the following figures : 1922, £103,000 ; 1923, £104,000 ; 1924, £128,000; 1925, £117,000 ; 1926, £142,000. The exports to New Zealand have fallen off considerably, due chiefly to the fluctuation in the value and quantitv of sugar shipped. In 1922 the exports amounted to £1,231,000 ; in 1923 to £942,000 ; in 1924 to £787,000 ; in 1925 to £1,024,000 ; in 1926 to £710,000. A study of the detailed imports of Fiji indicates a still further possible expansion of our export trade to that country in certain lines, such as confectionery, biscuits, bottled beer, cement, manures, soaps, timber, and brushware. Western Samoa. The following table gives in general terms the external trade for the past five years : —

The above shows that for the first time since 1922 an adverse balance was recorded in 1926.

5

Year. Imports. j Exports. | Total Trade. £ £ ! £ 1922 .. .. .. .. 282,939 365,610 648,549 1923 .. .. .. .. .. 268,881 288,774 i 557,655 1924 .. .. .. .. .. 274,803 361,418 636,221 1925 .. .. .. .. .. 345,989 379,388 725,377 1926 .. .. .. .. .. -324,940 320,783 ; 645,723