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3. I regret the delay in forwarding this report, but unfortunately the original Chairman, owing to pressure of business, was unable to hold any meetings of the committee before his departure for England in May last.
I have, &c.,
Enclosure in No. 34
G. B. HADDON-SMITH,
Governor.
REPORT OF COMMITTEE ON COMMERCIAL AND INDUSTRIAL POLICY AFTER THE WAR. To His Excellency
SIR,
Sir G. B. Haddon-Smith, K.C.M.G.,
Governor.
We have the honour to submit the following report :- General Observations on the Recommendations of the Paris Conference from the point of view of Grenada.
Tariff against Enemy Countries.-In view of the conclusions arrived at by the representatives of the Allies at the Economic Conference at Paris, we urge the continuance of prohibition of importation of goods of enemy origin for so long a period as it can be effectively carried out, or until circumstances, such as the restoration of the industries of the Allied countries, justify its modification, and thereafter the establishment of a tariff against the enemy countries sufficiently substantial to defeat any attempt to overcome its effect, either by way of subsidized steamers, preferential freight rates, bounties, or other means.
2. Preferential Tariff in British Empire, including United Kingdom.— Concurrently with measures to penalize enemy trade by tariff restrictions there arises the question of developing and conserving the trade and resources of the Empire by the same means. It seems inevitable that the present economic policy of the United Kingdom must to some extent be revised and brought into line with that of the Empire. Without a tariff system it is difficult to see what com- pensatory measures of an adequate nature can be adopted by the Mother Country in response to Colonial tariff reductions in favour of commodities of British origin. This question affects Grenada as it does all West Indian Colonies more or less owing to our tariff being imposed solely for revenue purposes. Any reduc- tion in import duty by the operation of preferential rates requires to be met by either (a) taxation in other directions, (b) reduction of expenditure on certain services, or (c) increased export trade with the country granting reciprocal tariff arrangements.
3. It is possible that the Mother Country's compensation for preferential trade entry into the markets of the Empire may be provided by other means than a tariff. The measures referred to in C I. of the Conference recommendations indicate a combination of different methods, and these might include the provision of substantial subsidies to steamship lines to Empire ports, and to cable companies in return for further reduced rates. The defect in such means of compensation alone, as compared with a tariff or in combination with a tariff, lies in the inelasticity of the arrangements. Granted that such compensation might be adequate to meet preferential tariff reductions adopted throughout the Empire at the start, there would be no means, comparable to those possible under a tariff, of meeting the frequently changing conditions that are bound to ensue.
4. Intermediate Tariff for Allied Countries, or for Allied and Neutral Countries. Combined with establishing a tariff against enemy countries, and a preferential tariff within the Empire, the recommendations of the Conference indicate giving also a degree of preference to Allied countries and a general tariff for neutral countries, or, alternatively, an intermediate tariff for Allied and neutral countries. The position of the United States of America made this point difficult for the West Indies to decide upon, as a large portion of their trade is carried on with the United States of America, and discrimination between Allies and a friendly neutral might have injuriously affected trade interests. This difficulty has now disappeared with the entry of the United States of America into the War as an Ally. It is immaterial to this Colony whether Allied and neutral countries are put into one section of tariff or not, and recommendations on the point should rightly be left to other authorities.
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5. Tariff on Export of Articles on which Enemy Countries are Dependent.- The restriction of exports of such articles as are essential to the industries of enemy countries and for the supplies of which they are dependent to a great extent on the British Empire also arises from the recommendations of the Conference, and is much more difficult to arrange for than the restriction of imports. Certi ficates of origin may under certain conditions satisfactorily establish the origin of imports, but certificates of ultimate destination of goods exported via neutral countries are more difficult to control, and the success of any measures in that direction will depend greatly on the activities of the Consular Services, and if In the adopted may require an enlargement and improvement of that Service. absence of knowledge of what commodities may require to be placed in the list of restricted exports, we are unable to deal with this point more definitely respect of its possible effect on Grenada. except to draw attention to the need for careful study of the economic effect such restriction might have on certain Colonies, and for providing compensatory outlets for surplus produets debarred from export to enemy countries.
Specific Questions referred to the Committee.
(a) What industries are essential to the future safety of the nation, and
what steps should be taken to maintain or establish them?
6. Agricultural industries alone exist in Grenada, and the principal products exported are cocoa, nutmegs and mace, lime juice, cotton and cotton seed. Cocoa and spices represent between them ninety-three per cent. in value of the total exports; lime juice and cotton are relatively subsidiary industries.
7. It is presumed that to a certain extent all these products-being foodstuffs, excepting cotton, which itself is the raw material for an important British industry -are essential to the future safety of the nation. The main products--cocoa and spices are at least essential to this Colony's existence. They are permanent cultivation, which reaches the fruition stage only after several years of unpro- ductive cultivation. It is not possible in their case, as it is with annual cultiva- tion, to change to another product. They are firmly established and the Colony's prosperity is inseparably connected with them.
8. In view of these circumstances we have no suggestions to make under this head except to point out that the maintenance of our local industries would be Safeguarded by a preference in British markets.
(b) What steps should be taken to recover home and foreign trade lost
during the War and to secure new markets?
9. This Colony has not lost any trade by the War; on the contrary, owing to the rise in value of the main products exported the value of exports has greatly increased, and has brought a corresponding increase in imports in its train.
10. There has, however, been a further trend of trade to the United States of America in place of the United Kingdom, a result almost inevitable owing to the restriction of exports from the latter country and the delay and irregularity in executing orders on account of transport difficulties. Some part of this trade will naturally revert to the United Kingdom after the War is over, but as steam- ship communication with the United States of America is speedier and more frequent, and as, moreover, it is more difficult to recover a trade that has been lost than to keep it, special attention will have to be directed to improving the steam- ship services between the United Kingdom and the West Indies, and possibly to further reduction in cable rates.
11. As an instance, it may be mentioned that the United Kingdom has failed to obtain any share of the motor-car trade that has sprung up in this Colony since the War Motor transport was introduced into the island in 1914, and although among the first half dozen cars one or two were of British make, not one of the succeeding hundred cars is of British manufacture. The greater degree of standardization and the readiness with which renewals and spare parts can be obtained are factors favouring the American trade.
12. Venezuelan Thirty per cent. Differential Duty. To some extent this Colony is affected by the thirty per cent. differential duty imposed by Venezuela, in violation of existing treaties, upon produce and merchandize imported by the Republic from the British West Indies, and we accordingly support the resolution passed at the recent meeting of the Associated Chambers of Commerce of the West
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