cuap. vi] TRADE RELATIONS AND CURRENCY 1177 
is not to be supposed that the people of this country would, 
in deference to the views of the Colonies, depart from the 
principles of free trade, under which the trade and commerce 
of the Empire has attained to such unexampled prosperity. 
The New Zealand Government seem not to have perceived 
the difference in principle between the formation of a Customs 
union and the conclusion of reciprocity agreements. Customs 
unions, which have hitherto, as far as I am aware, never 
been formed except between neighbouring communities, 
have for their object the removal of the barriers to trade 
created by artificial boundaries, and the establishment of a 
cheaper and more convenient mode of collecting the Customs 
revenue of the united countries. But the formation of such 
a union does not, in itself, involve any question of protection 
to native industry, nor of inequality of treatment of imports 
from countries not belonging to the union. On the other 
hand, such reciprocity arrangements as the Colonies desire 
to conclude, are not confined to the promotion of free inter- 
course between each other, but are intended to secure for the 
trade of the respective Colonies special advantages, as against 
imports from other places, in return for corresponding 
concessions. It is no doubt true, as the New Zealand 
Memorandum points out, that reciprocity agreements might 
somewhat mitigate the evils of the ‘retaliatory tariffs of a 
protectivecharacter which have grown up’ in the Australasian 
Colonies. But, although they might avert the ruinous policy 
of retaliation, they would also tend to perpetuate and 
strengthen the system of protection, and to aggravate in 
other quarters the very evils which as between the favoured 
Colonies they would professedly diminish. 
A Customs union, while it would incidentally secure im- 
portant advantages to native industry, by the removal of 
all obstacles to internal trade, would do so without estab- 
lishing the principle of differential duties. 
The Colonies forming the union might, no doubt, pursue 
a Protectionist policy, and as Her Majesty's Government 
have ceased to interfere with the right of the self-governing 
Colonies individually, as claimed in the Memorandum signed 
by the New South Wales, Tasmanian, and South Australian 
delegates, ‘ to impose such duties on imports from other 
places not being differential as each Colony may think fit,” 
they would have no reason for interfering with the right of a 
Colonial Customs Union to impose such duties; but there 
would be nothing in the union itself, as there would be 
in the proposed reciprocity agreements, inconsistent with