611.47H31/36
Memorandum by the Acting Economic Adviser (Livesey)
Mr. Masters2 called by appointment arranged by Mr. H. O. Chalkley, Commercial Counselor of the British Embassy, with the Secretary’s office. He was accompanied by Mr. J. W. Collins, New Zealand Trade Commissioner, Toronto, Canada; Mr. W. J. Stevenson, Official Representative, Customs Department, Dominion of New Zealand, New York; and Dr. R. M. Campbell, Economic Adviser to the New Zealand Delegation to the Monetary and Economic Conference. The Americans present were Mr. Frederick Livesey, Acting Economic Adviser; Mr. John D. Hickerson, Acting Chief, Division of Western European Affairs; Dr. [Page 120] Wallace McClure, Assistant Chief of the Treaty Division; Mr. Paul T. Culbertson and Mr. John R. Minter of the Division of Western European Affairs.
Mr. Masters said he had called at the Department of Commerce in the morning on advice from the British Embassy that that Department would be charged with commercial negotiations but had been referred by the Department of Commerce to the Department of State, after an opportunity had been given for discussion with various commodity experts. He was interested in discussing the possibilities of a trade agreement with the United States. New Zealand was a producer of raw materials and its interest would be in the sale of such products in the United States. In return it would be glad to facilitate the sale of certain American products in New Zealand by favorable tariff terms. New Zealand does not have a high tariff for protective purposes as do, for example, Australia and Canada. Its tariffs are for revenue.
Asked regarding the tariff on automobiles, Mr. Masters said it was about 45% on American cars, being unusually high on this product.
Mr. Masters was told that the officials charged with such matters in the Washington Departments had made certain general studies of trade relations in preparation for reciprocity negotiations and were now making intensive studies in preparation for exploratory conversations which had been announced with five different countries. The New Zealand situation had not yet been intensively studied and could not immediately be so studied in view of current pressure of other studies. The United States would be keenly interested in obtaining a reciprocal trade agreement with New Zealand, would be glad to give intensive study to the subject as soon as possible, and in the meantime welcomed the opportunity for informal discussion with Mr. Masters.
Mr. Masters suggested that we run over the situation with regard to New Zealand products. In reply to a suggestion that it would be undesirable to have any public indication of discussion of particular commodities, Mr. Masters suggested the conversations should be strictly confidential on both sides. No publicity had been given to his visit to the Department and the New Zealand visitors did not expect to have any further contact with reporters in this country.
The first commodity taken up was wool. Mr. Masters stated that New Zealand wool valued at 12 cents is subject to thirty-four cents American duty. The United States is not self-sufficient in wool and New Zealand would be glad if the duty on its wool could be lowered to facilitate sale in the United States. In the discussion, the suggestion was made that as the United States expects to negotiate under the unconditional most-favored-nation clause and to generalize the negotiated rates to all countries which do not discriminate against American trade, [Page 121] it would have to make a careful study of a commodity like wool which is of importance to the trade of several countries such as Australia, the Argentine and South Africa, as well as New Zealand, and carefully determine the most advantageous policy. The Americans present did not have the expert knowledge regarding wool to judge whether, for example, there were any special characteristics of New Zealand wool which would justify a tariff treatment different from that given to wools from other countries. Mr. Masters said that in that precise connection he and his assistants were proceeding to Boston August 17 to examine into the conditions in the American wool market. He was of the impression that New Zealand wool was of a distinctive grade not produced in the United States and therefore not directly competitive.
In reference to butter, Mr. Masters was told that apparently the United States is working into a position of self-sufficiency and overproduction for the domestic market. American dairy farming was generally regarded as one of the relative prosperous branches of agriculture but the newspapers were currently reporting rioting in New York State with farmers blockading roads and spilling milk on way to market, and similar troubles had been reported from other States. The Agricultural Adjustment Administration is considering codes for milk producers in the districts supplying the different metropolitan centers—Mr. Masters was shown some twenty mimeographed tentative codes of this sort. The details of this situation are naturally obscure to all except specialists but it did not seem to offer favorable prospects for tariff concessions. The New Zealanders developed considerable interest in this situation per se.
The question as to the possibilities of marketing New Zealand mutton in the United States was raised by a question on the American side. Mr. Masters expressed great confidence in the possibility of marketing New Zealand mutton, in view of its quality, were there not a prohibitive tariff.
The conversation having lasted an hour or more, Mr. Masters broke off the discussion of individual commodities and raised the question of the possibility of negotiations. New Zealand was eager to have a trade agreement—the mere knowledge of this fact might be of interest to the United States at the moment of tariff discussions with the Argentine. He was assured that the United States also desires a tariff agreement and will be glad to take the matter up when it is practical to do so. Mr. Masters inquired how the New Zealand Government would learn that the United States is ready to negotiate. Would it be necessary that all negotiations be conducted at Washington? How can the New Zealand Government keep in touch with the situation? He was assured that this Government will give the New Zealand Government timely information [Page 122] and reference was made in this connection to the correspondence already exchanged between the New Zealand Government and the American Consul General at Wellington.
- Robert Masters, New Zealand Minister of Industries and Commerce.↩