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Salient. Victoria University Student Newspaper. Volume. 34, Number 5. 1971

S.A./N.Z. Trade — Economic Relations:

page break

S.A./N.Z. Trade

Economic Relations:

From the paper "A Survey of New Zealand's Relations with Southern Africa" by M.P.K. Sorrenson, Auckland University, presented to the New Zealand Race Relations Council, February 1971.

New Zealand's trade with southern Africa is of little economic value and amounts to less than 1% of our imports and exports respectively. In the 1969-70 year New Zealand's trade was as follows: (1)

(SN.Z.)
Territory Exports Imports
Republic of South Africa 3,111,639 3,941,408
South West Africa (Namibia) 168 575
Botswana nil nil
Lesotho nil nil
Swaziland nil nil
Rhodesia nil nil
Mozambique 610,000 53,259
Angola 3,4222 nil

Trade with the territories other than Rhodesia and South Africa requires no further comment. So far as Rhodesia is concerned, trade has ceased following the imposition of sanctions. In the last full year of trade. 1964-65, New Zealand's imports from Rhodesia were worth $577,000 and her exports $217,000. The largest import was tobacco worth $568,000.(2) In 1965, following the unilateral declaration of independence, New Zealand withdrew British Preferential tariff rates from Rhodesia, excluded her from the sterling area and imposed sanctions on tobacco. Nevertheless tobacco imports from Rhodesia jumped to $996,000 for the 1965-66 trade year, possible because of heavy importing in the latter half of 1965 in anticipation of sanctions.(3) No imports were recorded for 1966/67. In 1966 New Zealand applied selective sanctions on trade with Rhodesia, in accordance with the Security Council resolution of 16 December. Then in 1968 New Zealand applied total sanctions to all economic dealings with Rhodesia as a result of the Security Council resolution of 29 May.

Though there is no direct evidence that New Zealand traders have breached the sanctions against Rhodesia, there is the curious business of tobacco imports from South Africa. New Zealand imports of tobacco from South Africa rose from $104,000 in 1964/65, the last year before U.D.I., to a peak of S655.0 in 1967/68, and fell back to $332,000 in 1969/70. It is possible, though unlikely, that this was Rhodesian tobacco simply re-exported through South Africa. Probably it was South African grown tobacco which the South Africans were able to export in large quantities (New Zealand is not of course the only buyer) because they have used Rhodesian tobacco for domestic consumption. If this explanation is correct, then New Zealand tobacco importers have been aiding and abetting the South Africans in their defiance of U.N. sanctions against Rhodesia.

Though New Zealand's trade with South Africa is much larger than the trade with other territories in southern Africa, it is insignificant in terms of total trade. In 1967/68 New Zealand imports from and exports to South Africa were both nearly $2 million of a total trade of about $750 million.(4) New Zealand is equally unimportant to South Africa, having accounted for only 0.1% of her total external trade in 1968. New Zealand's trade with South Africa hardly exceeds that with the Commonwealth territories of East or West Africa; we import almost as much from Ghana as we do from South Africa. In the long term New Zealand has better prospects for expanding trade with the tropical African countries than she does with South Africa: and of course there are even better trade prospects in Europe, Asia and the Americas. South Africa is about 19th in order of significance of countries from which we import, and about 18th on the list to which we export. Despite trade missions to South Africa sponsored by the Manufacturers' Federation in 1968 and 1969, there appears little prospect of substantially increased trade. 'Given the strength of domestic industry in South Africa and the novelty to New Zealand of manufactured exports, it is difficult to see New Zealand gaining more than the fringe of a relatively small market. (5) In any case with their high labour costs, New Zealand manufacturers could scarcely compete with South African manufacturers who employ cheap, non-union African labour. The conditions are much the same in agriculture where New Zealand's prospects are equally dim. Here the most we can hope for is an occasional windfall in dairy produce or meat arising from a drought in South Africa. In other words the South African market is scarcely worth cultivating; it would not cost New Zealand much to abandon it, as she may well be forced to do if compulsory U.N. sanctions are ever applied to South Africa.

If compulsory economic sanctions are still a somewhat remote prospect, it is worth recalling that the General Assembly has on numerous occasions called for voluntary sanctions. New Zealand has always ignored the request. The latest resolution of the Special Political Committee of 17 November 1970 calls on Members to terminate all military, economic, technical and other co-operation with South Africa; to end tariff and other preferences to South African exports and facilities for investment in South Africa; and to ensure that companies registered in their countries and their nationals comply with U.N. resolutions on this question. New Zealand abstained on this resolution and may well intend to ignore it. But she could be brought to book by the Special Political Committee which instructed the Special Committee on Apartheid to prepare reports on continued collaboration by governments or companies and individuals with South Africa.

There are a number of areas of collaboration between New Zealand and South Africa which, if continued, could infringe the terms of this resolution. The recent sale of a trainer aircraft to a South African buyer is a case in point. Then there are the tariff preferences which New Zealand grants South Africa, some of which give her significant advantages over more important trading partners. The preferences derive originally from the 1906 trade agreement though the rates now in force were negotiated in 1947 and incorporated in the 1948 Gatt agreements. New Zealand admits a variety of South African fresh and dried fruits free of duty and various other products at tariffs lower than or equal to the British Preferential tariff. In return South Africa admits free of duty New Zealand casein, hops, rennet, seeds and raw wool, and at a low tariff certain other products like butter, cheese and meat.

Some of the tariff concessions allowed to South Africa give her the same or better rates than Commonwealth countries, though South Africa is no longer a member of the Commonwealth. Nearly all of the preferences put her on more favourable rates than are allowed to Japan, America and the European Economic Community, all of them far more important trading partners whose goodwill is likely to be badly needed in the difficult years ahead for New Zealand's trade. The preferences, according to the latest tariff schedule, include:

oranges

all British sources and South Africa free;

all other sources 24.6c per 100lb.

grapes

Australia and South Africa free; all

other sources 49.8c to $1.66c per 100lbs.

stone fruits

Australia and South Africa free; British

Preference (B.P.) $1.68 per 100lbs.

dried fruits

(raisins)

B.P. and South Africa free; others Most

Favoured Nation (M.F.N.) 37.2c per 100lbs.

dried fruits

(sultanas)

B.P. and South Africa free; M.F.N. 83c

per 100lbs.

wines

(sparkling)

South Africa $1.42 per gall; B.P. $1.50;

M.F.N. $1.95.

wines (others,

less than 25%

proof spirit)

B.P. 90c: Australia and South Africa

S.1 .12: M.F.N. $1.20.

wines(others,

25-40% proof)

B.P. $1.10: Australia and South Africa

$1.32: M.F.N. $1.40.

spirits

B.P. $1.10p: Australia and South Africa

$1.32: M.F.N.$1.60.

Of these concessions probably the most significant is the preference granted to South African sparkling wines which are allowed in at a lower tariff than all oilier sparkling wines. Imports of these from South Africa have risen sharply from $100,334 worth in 1967/68 to $153.029 in 1969/70. Such a tariff concession to South Africa and the corresponding discrimination against sparkling wines from France. Germany and Italy seem inexplicable in view of the urgent need for New Zealand to conciliate the E.E.C. countries now that negotiations have started for Britain's entry to the Community.

The Special Political Committee resolution of 17 November 1970 called on Members to desist from economic, technical and other co-operation with South Africa. add referred to an earlier resolution which had called on Members to prohibit financial and economic interests under their jurisdiction from co-operating with the Government of South Africa or companies registered in South Africa. There are a number of ways in which New Zealand activities have been at odds with these resolutions. For instance, the Department of Industries and Commerce provided technical assistance for and sent an adviser with the two Manufacturers' Federation missions to South Africa.' The department also issued a Handbook(6) for members of the 1969 mission, drawn up with the help of the Ministry of Foreign Affairs. This advised members of the mission not to become involved in page break controversy on apartheid, since this might 'prove counterproductive' because race matters aroused 'deep feelings' in South Africa the implication being that if New Zealand businessmen opposed apartheid they were to keep their mouths shut lest they spoil their chances of doing good business by upsetting the white South Africans. Though the booklet also pointed out that officially New Zealand had voiced opposition to apartheid and had applied the U.N. embargo on arms to South Africa, it went to some trouble to emphasise that no other trade boycott existed, despite U.N. calls for a total embargo. It reminded members of 'African criticisms of those Western countries, including New Zealand, which have ignored these calls, [which] should be borne in mind during the Hast African leg of the tour in particular. (8) Since the mission was going on to Last Africa the members were likely to have to fend off some difficult questions on their doings in the Republic. But the tendentious material in the Handbook shows the extent to which government was prepared to encourage businessmen to do business with South Africa despite apartheid, and despite U.N. resolutions on the subject.

Photo of an oil tanker with a city in the background

There have been other instances of government collaboration. Perhaps the most notable is the recent direct grant by the government to the so-called 'International' Wool Secretarial, a body composed of the New Zealand. Australian and South African Wool Boards. Hitherto, the New Zealand Wool Board had found its own contribution taken from a direct levy on wool producers. But now the government has levied the taxpayer to promote the marketing of South African as well as New Zealand wool. Since the South African wool is produced with the aid of forced labour often, indeed, assigned prison labour the situation cannot be accepted with equanimity by New Zealand taxpayers and unionists.

Several other New Zealand Producer Boards have recently been co-operating with then South African counter parts in the marketing of produce. These include the Dany Board and the Apple and Pear Board. The latter has been involved in joint-advertising campaigns, including the advertising of New Zealand. Tasmanian and 'Cape' apples on London buses. Such economic collaboration is likely, sooner or later, to earn New Zealand the condemnation of the U.N.

There is a large number of British firms with branches or subsidaries or subsidaries in New Zealand which also have similar [unclear: materests] in South Africa. Most of these firms have already been identified by such organisations as the Anti-Apartheid Movement ([unclear: London]) and are being subjected to various forms of pressure.(9) Some of the New Zealand subsidiaries like [unclear: Rothmans] (N.Z.) Ltd and Caltex Oil (N.Z.) Ltd have already been called to account, though more for the way in which they have used business resources to promote continued sporting exchanges on an apartheid basis.(10) There are also some New Zealand based companies with branches or subsidiaries in South Africa. These include the South British lnsurance Company, which has long-established branches in South Africa. Others, like the New Zealand lnsurance Company and Crown Lynn Potteries, have recently established branches there. Such companies, it seems have no compunction in making use of the ready supplies of regimented African labour. But lew other companies are likely to follow suit; it is known that some businessmen have refused to take advantage of the apartheid labour system.

To sum up, one can suggest that New Zealand's trading relationship with South Africa, though insignificant in terms of total trade, has some dangerous implications. Our willingness to defy U.N. resolutions on economic sanctions, even though these are not yet obligatory; our continuation of special tariff, preferences; our readiness to co-operate on a governmental or producer board level; and the willingness of some New Zealand companies to exploit African labour all these factors help to underline the lukewarm opposition to apartheid that has also been evident in our performance in the U.N. and the Commonwealth.

(1)I am grateful to the Department of Industries and Commerce for these and other statistics. Unless otherwise indicated, statistics used below were supplied by the Department.
(2)New Zealand Official Year Book, 1967, pp.642, 665, 667. This tobacco figure is for the defunct 'Rhodesian Federation' but most came from Southern Rhodesia.
(3)ibid., 1968, p.663.
(4)This paragraph is based on C. Gillion and J. Suckling. New Zealand's Trade with South Africa', a paper delivered before the N.Z. Institute of International Affairs, July 1969.
(5)ibid., p.9.
(6)'Handbook for the New Zealand Manufacturers Federation Trade Mission to South Africa'. Department of Industries and commerce, August 1969.
(7)ibid., pp.10. 34.
(8)ibid., p.36.
(9)See. The Anti-Apartheid Movement. 'List of British Firms subsidiary/ Associate Companies situated in South Africa.' The list has been compiled from "Who Owns Whom (U.K. edition), 1968.
(10)For instance by P.J. Sojjak in "Focus", Aug-Sept 1970.