The Reminiscences of Zafrulla Khan — Page 95
95 REMINISCENCES OF SIR MUHAMMAD ZAFRULLA KHAN I have said, the whole spirit had been that the railways were a government establishment and had to be run for the benefit of government and its employees which was completely wrong. I think I made some contribution towards that attitude being charged. But much the more important portfolio of the two was the Commerce portfolio. It raised much more difficult and far reaching problems. The most difficult and important matter that I had to deal with fairly early was the Ottawa Trade Agreement. The Ottawa Conference, which was a conference of the whole Commonwealth and Empire, had instituted the system of inter-Commonwealth preference in customs duties, which is still operative to a certain extent and is, incidentally, creating a serious difficulty for Britain with regard to its entry into the Common Market. It was considered that this system would stimulate inter- Commonwealth trade, and would do a lot of good. It did indeed strengthen the commercial bonds between different sections of the Commonwealth and also made it easier for Commonwealth members to get together and make adjustments and corrections which were needed, particularly with regard to the price levels of primary commodities, which are a very important factor in the economy of most of the Commonwealth countries. Britain was the one outstanding industrial partner and the rest of the Commonwealth comprised mostly producers of primary commodities. The way the Ottawa system worked was by grant of reciprocal preferences. For instance, certain British products, particularly Lancashire textile products, enjoyed preferential rates of duty in India. They paid lower rate of duty than, for instance, Japanese products and products from other parts of the world. On the other hand, Indian primary products like cotton, spices, etc. enjoyed a lower rate of duty in the United Kingdom than, for instance, cotton from Egypt and spices from Indonesia, and thus secured a better share of the market in the United Kingdom. The actual working of the Agreement over a period had shown that it needed adjustments in certain respects. There was opposition in the Assembly to it, more political than on the merits. That kind of opposition was a part of the constitutional pattern. The Assembly could put questions, pass resolutions, criticise and refuse to grant supplies. But ultimately it could be overridden in everything under the then