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Friday, 22 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - I move -

That the request be not pressed.

In the special circumstances which exist in relation to this item, particularly as regards the stage which certain treaty negotiations have reached, it is impossible for the Government to agree to a reduction of the margin which exists between the general tariff and the intermediate tariff. For this reason alone I have moved that the request be not pressed. When introducing tariff proposals on the 6th December, 1934, in which the rates under the general tariff were, on the whole, somewhat in excess of the recommendations of the Tariff Board, the Minister explained that the reason for the retention of the higher rate was to place the Government in an advantageous position to negotiate with foreign countries by having something tangible to offer to those which trade freely with us and something to withhold from those who treat us badly.

This policy, with exceptions in special circumstances, has been observed in all Customs tariff proposals presented to the Parliament since that date, but more especially wherever adherence to the principle has been possible without raising the level of the duties applicable to imports from our good customer countries. In considering the position I should like honorable senators to appreciate that prior to the adoption of the practice of retaining duties somewhat in excess of the level necessary for the protection of domestic industry, the Australian tariff had not been framed as an instrument to facilitate treaty-making. It consisted, so far as foreign countries were concerned, of a single-column in which the rates of duty imposed on the commodities of treaty and non-treaty countries were alike and no margin was left for granting favours to treaty countries. In this respect the Australian tariff differed from the tariffs of most of the important countries of the world which consist of two sets of duty - (1) Minimum rates expressing the level of the duties which will be accorded to most-favoured-nations; and (2) Maximum rates ostensibly and admittedly imposed for bargaining purposes and applied to non-treaty countries. While some honorable senators may be opposed to the principle of tariff bargaining, I feel sure that the great majority will recognize that it is necessary to deal with conditions as we find them. It would be idle to deny that tariff bargaining enters into all trade-treaty negotiations. Moreover, it is a fact that cannot be disguised that restrictions are not. infrequently imposed on commodities of a particular country with the object of forcing that country into negotiations. It can, I think, be claimed that Australian export commodities have not escaped this treatment. If we ignore these factors in framing our tariff policy we are, to put it mildly, acting unwisely.

In negotiating trade agreements the Government is naturally seeking to safeguard or consolidate the position of Australian export commodities in particular markets. If on our side any tariff reduc tions that we are in a position to make, are granted gratuitously without at the same time obtaining undertakings as to the future treatment of Australian commodities, the Government will be open to the charge of failing to use the opportunity at hand to the best advantage. We should not seek to give these reductions away without benefiting our export trade. The item now before honorable senators has figured prominently in the negotiations with certaincountries. As all subsequent negotiationshave proceeded on the basis of the duties now proposed, it is desirable that no alteration should be effected at this stage. I trust that the committee will not press the request.

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