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Wednesday, 2 April 1941

Senator LECKIE (Victoria) (Assistant Minister) . - I move -

That the bill bc now read a second time.

The Australia-Southern Rhodesia trade agreement is the result of negotiations conducted at Canberra with the Southern Rhodesian Minister of Agriculture and Lands, Captain F. E. Harris, D.S.O. Designed to promote trade between Australia and Southern Rhodesia, the agreement provides for reciprocal tariff concessions on a preferential basis. The range of Southern Rhodesian products for which market opportunities exist in Australia is limited and, accordingly, the agreement provides for concessions by Australia on only three products - tobacco, crude asbestos and chrome ore. The item to which Southern Rhodesia attaches the most importance is tobacco. Southern Rhodesia is a producer of highgrade tobacco leaf of Virginia type and has built up a considerable export trade, particularly to the United Kingdom. The Southern Rhodesian Government is desirous of opening up further avenues for the export of tobacco leaf and, in existing circumstances, it would also be of considerable advantage to Australia if a greater proportion of our import requirement1! of tobacco could be obtained from Southern Rhodesia.

There is no question, of course, of Rhodesian leaf replacing the Australian product. The Australian grower is assured of a market for his production. Indeed, in recent months, consumption of Australian leaf has been at a higher annual rate than current production. The Government is endeavouring to extend local production along sound lines in order to meet as large a proportion as possible of total requirements. Nevertheless, for some years to come, local production will have to be supplemented by very substantial imports. The exchange costs involved by these imports are heavy and, in present circumstances, it is obviously advantageous for us to encourage production within the sterling area, thus lightening the burden on the Empire's dollar resources. Accordingly, the Government has agreed, subject to the approval of Parliament, to grant a tariff preference of 9d. per lb. on unmanufactured tobacco of .Southern Rhodesian origin. No spectacular results are expected as a result of this preference, but it is hoped that it will be possible to obtain at least some of our import requirements from Southern Rhodesia in the immediate future. From the longterm point of view, the extent to which Australia will be able to draw supplies from Southern Rhodesia will depend very largely on the capacity of producers in that country to increase their output of high-grade leaf suitable for blending with Australian tobaccos. Crude asbestos is an essential raw material, and is at present admitted into Australia from British Empire sources free of both customs and primage duties. In recent years, crude asbestos has been the only important product exported by Southern Rhodesia to Australia. In 1939, the value of the trade as shown in the Southern Rhodesian statistics amounted to about £66,000.

Under the terms of the agreement, an undertaking is given that Southern Rhodesian asbestos will continue to be exempt from payment of primage duty and also that, should customs duties be imposed at any time, Southern Rhodesian asbestos will be admitted at the lowest rates accorded to any other country. Chrome ore, the third . item in which Southern Rhodesia is interested, is also admitted free of customs duty, but is at present subject to primage duty at the rate of 5 per cent, and, accordingly, is also liable to the special war duty of 10 per cent, of the amount of the duty payable. The agreement provides for the abolition of the primage duty on chrome ore of Southern Rhodesian origin and also contains a similar assurance with regard to customs duties as is given on crude asbestos. Manufacturing activities in Southern Rhodesia are on a relatively small scale and arc chiefly confined to the processing of local foodstuffs and raw materials; thus, the country is largely dependent on outside sources for its requirements of manufactured consumers' goods and industrial machinery and materials. Up to the present, Australia has had only a small share in Southern Rhodesia's import trade. Total imports into Southern Rhodesia in 1939 were valued at £9,000,000 and imports from Australia in that year totalled only £57,000. Wheat is the principal item in the trade, accounting for £28,000 of the total. The remaining items include textile bags, ploughs and other farm implements, timber, sporting goods, gelatine, flour and currants and raisins. One reason why Australia has failed to secure a larger share of the Southern Rhodesian market is that, owing to the existence of a preferential agreement between Southern Rhodesia and the Union of South Africa, many Australian products have been placed at a competitive disadvantage. The present agreement, if approved, will remove that disability in respect of those items of particular interest to Australia.

Under the agreement, Southern Rhodesia has undertaken -

1.   To continue to admit free of duty a schedule of Australian goods comprising 33 items, included in which are butter, gelatine in bulk, glue, hops, bags and bagging, dairy machinery, agricultural machinery, fencing materials, iron and steel products, patent leather, plywood and unmanufactured' wood.

2.   To accord specified preferential rebates ranging from 10 per cent, to 50 per cent, from the duties applicable to United Kingdom goods on a schedule of Australian goods comprising nineteen items. As regards these items, Australia is placed on the same footing as South Africa, which is at present receiving substantial preferences over Australia. Included in the goods in this schedule are wheat, canned and dried fruits, jams, jellies and honey, condensed and powdered milk, beer, brandy, wines, boots and' shoes, leather n.e.i., sporting and athletic goods.

3.   To accord British preferential tariff rates to a schedule of Australian goods comprising fourteen items, included in which are wheat, flour, confectionery, whisky, clothing, hats, hosiery, millinery, electrical goods, manufactures of rubber.

4.   To accord similar tariff treatment to Australian wheat in the grain and Australian wheat flour in the event of permits being issued for the importation into Southern Rhodesia of wheat in the grain and wheat flour in commercial quantities from any other country at rates of duty lower than those accorded to Australia under the agreement.

These concessions cover a wide range of products and give Australia an opportunity to supply a much greater proportion of Southern Rhodesia's import requirements than has been done in the past. The agreement contains the usual reciprocal clause with regard to content requirements. It is subject to the approval of the Parliaments of Australia and of Southern Rhodesia and is of indefinite duration, subject to six months' prior notice of termination. The Government is confident that the concessions provided for under the agreement will prove of material, benefit to both countries and will create useful opportunities for increased trade.

Debate (on motion by Senator Collings) adjourned.

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