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the products of the Colony; it is the nucleus of a department of overseas trade. This service should be made federal so that its benefits may be extended Pathe aber 617 African territories. Page 402 of 587
Customs
6. Customs should be a federal responsibility, and it would be desirable to constitute the territories into a customs union. The advantages of a customs union may be summarised as follows:-
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(a) the abolition of tariff barriers between the territories would expand the
domestic market for all commodities;
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(b) the abolition of tariff barriers would tend to minimise duplication and the uneconomic siting of industries and thereby ensure the most economic use of the factors of production in the area as a whole; (c) since the economies of the three territories are complementary, the abolition of trade barriers would tend to promote economic stability by making the area a more viable unit and thereby improving its capacity for economic development;
(d) the position of the area as a whole in bargaining on tariff matters with the outside world would be strengthened by the creation of a customs union;
(e) the abolition of tariff barriers within the area would make it more
attractive to commerce and capital investment from outside;
(f) the reduction of customs posts following upon the abolition of tariff barriers might lead to some saving in staff and economies in admini- stration, and would also be of advantage from the point of view of tourism.
7. The problems involved in the establishment of a customs union are highly technical and before a final decision to establish it is taken there should be a detailed and expert enquiry by a committee including representatives of the three territories.
8.
Before a customs union could be established certain difficulties would have to be overcome. They are as follows:-
(a) the three territories have developed different tariff systems which would not be capable of immediate alignment; and the different systems have resulted in different taxation structures.
(b) the present tariff structures of the three territories reflect their differing commercial and industrial needs (for example, Nyasaland levies import duties on cotton piece-goods which are not levied in the other two territories). Difficulties would arise in the initial stages in imposing a uniform tariff system if in consequence the interests of certain producers and industries had to suffer.
These difficulties do not appear to be insuperable, and they would clearly fall to be considered by the expert enquiry, which should be asked inter alia to consider the effect of establishing a customs union on trade and commerce in the three territories and on the revenues of the territorial Governments.
9. One further difficulty in relation to a customs union is the fact that the Congo Basin area of Northern Rhodesia and the whole of Nyasaland lie within the conventional zone covered by the Congo Basin Treaties, within which discriminatory tariffs are not permitted. Even if the Congo Basin régime is to remain in force in Nyasaland and the Congo Basin area of Northern Rhodesia, it would appear that a customs
that a customs union between the territories could with advantage
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be established. But it would none the less be essential to give the most serious and early consideration to the possibility of excluding the Congo Basin
the conventional zone
area of Northern Rhodesia and Nyasaland froPage 403 of 589ne covered
10. Whether a customs union is established or not it would be necessary to set up a Central African Tariff Advisory Committee representative of the three territories and the federation.
Trade Treaty Negotiations
11. Great practical advantages would be derived from conducting trade treaty negotiations on a Central African basis. At present both Northern Rhodesia and Southern Rhodesia have commercial treaties with the Union of South Africa; and one of the early tasks of a federal department of external trade would be to prepare for the re-negotiation of these treaties on a Central African basis. In negotiations relating to an International Trade Organisation and the General Agreement on Tariffs and Trade, Southern Rhodesia has been separately represented; if external trade became a federal subject the Central African Government would presumably be similarly represented.
12. The various aspects of external trade referred to above might be handled by a federal department of external trade, which might form part of the appropriate federal Ministry. This department would have full executive responsibility for these matters, which would fall within the purview of the federal rather than the territorial Legislatures.
INTER-TERRITORIAL AND TERRITORIAL ECONOMIC AFFAIRS
Inter-territorial Trade and Commerce
13. It is of great importance that the federal Government should be given adequate powers to deal with trade and commercial matters affecting two or more of the territories. Many of the practical difficulties which have arisen in recent years between the territories have been concerned with inter-territorial trade; coal for the Copperbelt is pehaps the outstanding example.
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14. It would not seem appropriate at the present stage for the federal Government and Legislature to be simply entrusted, as in the United States, with "inter-State commerce." "Inter-State commerce " is an extremely general expression and in the United States the scope of this phrase has been progres- sively extended by decisions of the Supreme Court until it covers a very large proportion of all trade and commercial matters. For example, the phrase has been held to cover the fixing of minimum wage rates, a matter which in Central Africa should be left to the territorial Governments and Legislatures. The proper course appears to be to give to the federal Government and Legislature responsibility for those inter-territorial trade and commercial matters which it is decided to make federal.
15. Railways, trunk roads, civil aviation and electricity supply should be federal subjects. In addition the federal Government should be given execu- tive responsibility for regulating the inter-territorial (but not the territorial) movement and distribution of locally produced or imported commodities which are in short supply. The list of commodities to be the responsibility of the federal Government should be promulgated from time to time on the advice of the Development Commission referred to in paragraph 19 below.