611.48A31/37
The Minister in the Union of South Africa (Totten) to the Secretary of State
[Received April 18.]
Sir: I have the honor to report that the present controversy in the South African Parliament regarding alleged favoring of the British Commonwealth in matters of trade frequently causes references to the unfavorable balance of trade between the Union and the United States.
In discussing the appropriation for the Prime Minister’s department a member of the Opposition asserted that the Union Government was in the power of financial groups, and that the economic policy of the Union is suffering from an Empire complex because of Imperial preferences. A Government member interrupted with the question “What about America?”, when the speaker admitted that the Union was also in an unsatisfactory position as regards the United States, owing to the motor trade.
On the same day a request was made to the Minister of Commerce for the figures of the total imports into the Union from the United States during 1934. He was informed that the total imports from the United States amounted to £10,793,713, while the exports from the Union to the United States only amount to £573,543. The questioning member then asked what measures the Government intended taking for adjusting the unequal balance of trade with the United States. The Minister answered to the effect that the Government was considering methods of adjusting trade balances with other countries, but that this could only be done after the projected legislation for amending the tariff had been passed by Parliament.
There is no doubt but that these references to the unfavorable balance of trade between the Union and the United States are made by those who are strongly pro-British or pro-Empire, in order to distract the attention of the Opposition from too much consideration [Page 86] of the advantages given to Great Britain and other parts of the Commonwealth.
Although the Government is well aware of the purpose of these references, it unfortunately is almost certain that they will be compelled to adopt some plan or attempt some bargaining on tariff lines in an effort to secure a more favorable trade balance with the United States. It is intimated that the Union will first demand from the United States the removal of duties on South African wool, and will also look hopefully to America for markets for other agricultural products, as well as certain base metals. The three-column tariff which will come into effect within the next three months will give the South African Government a powerful weapon to use in its demand for better tariff treatment.
The British motor trade has already considerable advantage in the way of preferences and preferential treatment. If, in addition to this, all imports of motor cars and accessories from the United States are put in the higher, practically prohibitive column, the result will be an enormous loss in the exports of automotive products from the United States to South Africa.
An apparently inspired special article in the Sunday Times of Johannesburg predicted that as soon as the new tariff became operative the Board of Trade and Industries would immediately begin an intensive campaign for the betterment of trade balances between the Union and America and Japan.
Any further indication of the Government’s attitude in this matter will be at once reported to the Department.
Respectfully yours,