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Salient. An Organ of Student Opinion at Victoria University College, Wellington N.Z. Vol. 21, No. 7. June 11, 1958

Our Trade Policy

Our Trade Policy

The tremendous fall in prices of our exports to Britain in the last year or so has brought to a head the question of our basic trade policy, Preference to Britain. Now that we have seen just how much preference Britain is going to give to us, the ugly suspicion rises in our minds that we have been had, played for the biggest suckers in history.

During the last war we New Zealanders sweated our guts out sending meat, wool, and dairy produce to an embattled Britain, as well as sending thousands of troops overseas. Before the war we could go whistle with our exports but when Britain was in trouble she came crying to us for help and we gave it. We stinted ourselves, sent farm produce to feed and clothe her people at half the world price! Britain wouldn't forget that, we were told. Not only that but we sent thousands of soldiers to fight Britain's battle against the Germans and Italians when they were needed desperately here to fight the Japanese who were surging through the islands irresistibly, their bombers reaching as close as Australia. Just a little further and the Japanese would have overrun us for our army was in the Middle East. Our land nearly became a battlefield but we sent our soldiers away to help the British! ! Surely they would remember that, we thought.

After the war we continued for years to send Britain produce at low prices, and we continued our mercy scheme of "Parcels to Britain", rationing ourselves so that we might send millions of free parcels to the British. We even gave the British a gift, of £1,000,000 sterling to help her in exchange difficulties. We bought hundreds of millions of pounds worth of dear British goods when we could have got them cheaper from West Germany, Japan, or Italy, because we believed that if we helped the British surely in our of need they would help us.

And did the British feel grateful for our sacrifices? Did they buy our goods on a fair preference as we bought theirs? No! They continued to sell us their products under the protection of high tariff barriers, but bought from wherever they could get things cheapest, giving us only nominal preference for our goods. They allowed butter to be dumped on their market at less than the price it was selling in the countries producing it, and expected us to lump it. When Holyoake went to Britain to try to get a fair deal for our farm products he got what amounted to the brush off from the British Government and an unfriendly British Press which told New Zealand not to bother Britain with her troubles.

And yet at the same time they expected us to continue to buy British. They sent the Queen Mother around to stir up patriotic sentiment, while they bought dumped butter and let the bottom fall out of our market without a murmur. What was sauce for the goose apparently was not sauce for the gander, for it was all right for Britain to buy products from the Argentine, with its wartime Fascist sympathies, from Austria, which was part of the enemy German Reich, and from Sweden, which fattened on selling armaments parts to both sides during the war, but it would have been disloyal for New Zealand to buy cheap goods from Germany, Japan, or Italy.

Now Skinner has gone to Britain to try to negotiate a new deal with the British Government. The failure of the Holyoake mission has shown that we can't deal with the British in a polite way, so Skinner had better get really tough with the British Government and make it clear that unless they give us a fair deal we will stop buying British goods entirely and swing all our orders to Germany and Japan. We should have done this far sooner when our prices first began to slide. If we had caused tens of thousands of British workers to become unemployed through not buying, the British Government would have hastily patched up an agreement (and maybe if we did a trade deal with Russia we would get more attention).

But whatever the deal, we had better make pretty certain that we don't have almost all of our trade with Britain, for we's had a pretty nasty lesson that it is not safe to let Britain keep an economic stranglehold on us. The best way to avoid this is to vastly expand trade with Japan (yes, our ex-enemy) which is one of our natural markets of the future. Japan already buys a great deal of our wool, and if we buy her manufactured goods she will be able to afford to buy butter and cheese and meat. Perhaps the Japanese will only be able to pay lower prices for our goods, but many of her goods are cheaper than those the British make, and so things should just about balance out. We will have to keep a wary eye on the Japanese to make sure that they buy as much as they sell, but that won't be an impossible task. Similarly we should try to expand our trade with West Germany, the United States, and the Soviet Union (a potential but slightly dangerous customer for dairy products). This will give us strong bargaining power in this and any further showdown with the British.

What happens in London in the next few weeks will determine our trade future. Obviously we cannot continue at the same high level of trade with Britain we had two years ago, but if Skinner is tough enough, and the Government ready to be as calculatingly mercenary about trade as the British are, we will be able to force out a fairly equal trade agreement. But we must be scrupulously careful not to buy more from the British than they buy from us, and make enough foreign trade agreements to safeguard ourselves against any collapse of our British markets.

And if we don't get a fair trade agreement then maybe we should say goodbye to the British and try to join up with a more powerful and economically strong country like the United States.

—D.P.