611.47H31/35
The Consul General at Wellington (Hitch) to the Acting Secretary of State
[Received August 6.]
Sir: I have the honor to refer to my despatches Numbers 318 and 332 of June 21 and July 14 respectively, on the subject of possible trade agreements to be entered into between the United States and New Zealand. In this connection it has been published in the local press that the Premier of New Zealand, the Honorable G. W. Forbes, is planning to stop in Washington for a few days on his return from the World Economic Conference in London for the purpose of discussing such agreements with you. I do not know, of course, what your policy is in this matter, but should like to take this opportunity to point out a few relevant facts supplementing those brought out in my despatches above referred to.
The present New Zealand tariff contains a general schedule applicable to all goods of non-British origin. A further schedule applies to imports [Page 118] from the British Empire and, in addition, there are separate agreements entered into with Australia, Canada, and South Africa establishing different schedules for articles originating in those countries. In every instance the general tariff is considerably higher than the preferential tariff or the individual tariff agreements. The difference varies with individual items, but it may safely be stated that, on an average, the duties imposed by the general tariff are, roughly, 100% higher than those imposed by the British preferential tariff. In a very great many instances British goods are admitted free of duty whereas others must pay 25% ad valorem. In others, and this is very common, Empire goods are taxed 20% ad valorem, and those coming under the general tariff provisions must pay at the rate of 40% or 45%. Over and above these margins, however, all goods admitted under the general tariff are subject to a surcharge of 9/40ths of the assessed duty which has the effect of adding from 5.6% to 11% onto the duty as stipulated in the schedule. For example, electric heating and cooking appliances are dutiable at 20% under the preferential tariff. Under the general tariff, however, they must pay 45% ad valorem plus 9/40ths which amounts to an additional 10.1%, making the margin of preference accorded to British goods over 35%, or almost double the minimum of 20% stipulated by the Ottawa Agreements. It it felt that a great benefit would accrue to American exporters to New Zealand if this surcharge might be removed or, better yet, if the difference between the British preferential and the general tariff might be reduced to a uniform 20%.
It is not known how definitely New Zealand is committed to grant “most favored nation” treatment in her treaties. In view of the separate agreements into which it has entered with other self-governing Dominions within the British Empire, it is possible that an additional agreement might be entered into applicable only to the United States. Weight is given to this suggestion by the fact that in 1932, as in previous years, New Zealand imported from the United States goods of greater value than from any other country except the United Kingdom, exceeding even Australia and Canada. American goods imported were valued at £3,267,086, while our nearest non-British competitors were the Dutch East Indies with £793,622, almost entirely petroleum products, Germany £459,971, and Japan £434,636. Such a preponderance in the import trade of this Dominion would seem to justify special tariff concessions not accorded to other nations whose interest in the New Zealand market is so much slighter.
As regards reciprocal concessions on our part, the standard of living in New Zealand is such that there can be no question of lowering the bars to goods produced by cheap labor. The importation of, and competition by, such goods would effectively annul the advantages to be [Page 119] derived from the industrial codes now being put into operation. There can be no danger of this, however, since labor in New Zealand is more effectively unionised and better paid than in almost any other country of the world. In every industry minimum wages are fixed by law, or rather by awards of compulsory arbitration courts, which also decide as to the weekly working hours. Examples of minimum weekly wages in effect as of March 31st, 1932, are as follows:
| Butter factory employees, general hands | 73s. | 9d. |
| Meat freezing, general hands | 82s. | 6d. |
| Slaughtermen, per 100 sheep | 36s. | 0d. |
| General farm hands | 45s. | 5d. |
| Shearers, per 100 sheep, shorn | 26s. | 0d. |
| Dairy farm hands | 43s. | 5d. |
The examples given above are taken from agricultural industries which are those most likely to compete with native American products. These, however, are the lowest paid groups, other wage scales being very considerably higher, as for example, coal miners, who receive 95s. 2d. per week, bricklayers at 94s., ordinary stevedores at 92s. 5d., etc. At present the New Zealand pound is stabilised at £5 New Zealand to £4 British. Prices, however, have risen very little since the stabilisation and for purposes of comparison conversion may safely be made at par, namely $4.85. At this rate the least paid of the whole list, dairy farm hands, receive $10.52 weekly, which compares very favorably with similar wages in the United States. The stigma of production by underpaid labor whose standards of living are exceedingly low cannot attach to New Zealand goods, and there need be no grounds for fear that the admission of the produce of this Dominion will undermine the standards set by the industrial codes now being established.
Respectfully yours,