TILE ATLANTIC: BOND OR BARRIER ?-IV
By SIR ARTHUR WILLERT
THE weakening of old obstacles to aconstrucs been accompanied by a stiffening of the tive foreign The American Government is, therefore, as Mr. Runciman discovered when he was in Washington last winter, earnestly pursuing that policy which deservedly bears Mr. Hull's name, the organisation, that is to say, of a systematic effort, not to bring about general free trade or anything approaching it, but to rescue commerce from the excesses of economic nationalism, from prohibitive tariffs, quotas, exchange con- trols, discriminations, barter, licensing systems, and so on. It is concentrating upon economic appeasement partly because, as pointed out in an earlier article, American opinion holds doggedly to the tradition against permanent political commitments abroad, and partly because it is realised that even the disjointed political forays permitted by that tradition, such as American leadership in an effort for another Dis- armament Conference, would in the British official jargon " serve no useful purpose " at this juncture.
The spear-head of the American effort is, of course, the Hull Trade Agreements Act passed in i934. The original purpose of that Act was mainly economic. The depression was still bad. American foreign trade was shot to pieces, and Mr. Hull saw that a balanced recovery demanded its resuscitation. To this end the impossibly high duties of the American Smoot-Hawley Tariff of 193o and foreign barriers against American exports had to be reduced. The Trade Agreements Act, therefore, empowered the Executive to negotiate Tariff Treaties with other countries and to lower American duties down to so per cent. of their present rates. The concessions given to one country were to extend auto- matically to all other countries, except those held to dis- criminate against American trade—at this moment Germany and Australia.
This freer-trading policy retains its domestic sanction. The Smoot-Hawley tariff wall is still too high. Inability to hoist sufficient exports over it aggravates the glut of gold from which the United States is suffering. Manufacturers and farmers demand foreign markets and so on. But in the past months Mr. Hull and his assistants, notably Mr. Francis B. Sayre, a son-in-law of President Wilson, have insisted more and more upon the value of their policy as a contribution to the campaign against economic nationalism which they think will, unless substantially alleviated, cause, at the best, another world depression and, at the worst, another world war. Mr. Hull was so insistent upon this point, when he appeared not long ago before the appropriate Senate Com- mittee to secure the extension of the Trade Agreements Act, that the minority of the Committee opposed to the Act complained in their report that " no matter what pertinent question was asked the Secretary, his reply invariably was that it was not relevant to the larger purpose involved, which he said was world peace."
Mr. Hull's ideas were put to me in Washington broadly as follows. Efforts to build a defence against war by direct political methods have failed. There remains economic action to the same end. There the United States can help. She has now negotiated i6 Trade Treaties. Of these Treaties II are with the countries of the Western Hemi- sphere, including Canada. They are the basis of the Pan- American " good neighbour " policy which, as was shown at the Buenos Aires Conference last December, has been so successful in bringing the United States and the Latin Republics into a loose organisation of peace, goodwill and lower tariffs. Canada alone of the countries of the Empire, France alone of the Great Powers, have concluded agree- ments with the United States, and are therefore within the freer trading organisation. The next step should be for Great Britain and the rest of the Commonwealth of British nations to come in, together with the Oslo group, some of whom have already got their American treaties, and any other countries with the good will and good sense to do so. Then the present disastrous restrictions upon inter- national trade would have been alleviated over a great part of the world.
After that one of two things would happen. If Germany, Italy and Japan came in, or even if Germany and Italy came in, well and good ; the processes of political appease- ment, such as another disarmament conference, could start. If, on the other hand, one or more of the anti-democratic countries stayed out, then the countries which might suffer from their obduracy would have sucked in so much strength from the freer-trading area that they would be in a better position to defend peace by diplomacy, or through the League of Nations, or, in the last resort, by war, than they are today.
Our support is essential for the success of the Hull scheme. However much its scope could be broadened, it would obviously not come to much as a measure of world-peace either economic or political, without the co-operation of the Empire. Moreover, the American domestic situation renders it excessively difficult for Mr. Hull to carry his programme further without an Anglo-American Treaty. The Treaties so far concluded have mainly helped the American manufacturer. They have lowered foreign tariffs for motors, machinery, manufactured foodstuffs, and so on. The farmer they have benefited but little, and the Canadian Treaty has actually lowered American duties on cattle, dairy products and lumber. The reductions are small and partial, but they were ruthlessly exploited by the Republicans in the Presidential campaign, and the farmers will be trouble- some unless the next trade treaty is with some big industrial country which imports primary products. Great Britain is the only such country available.
The negotiations for an Anglo-American Trade Agree- ment, which started some time ago, have thus revolved around primary products, such as fruit, fresh and dried, bacon, tobacco and timber. They have been going slowly, partly because of the need for consultation with the Dominions whose representatives are now arriving in London for the Coronation and for the Imperial Conference. For the American demands concern not only London but all the capitals of the Empire and especially Ottawa. They arc tantamount to a suggestion that, if the United States lowers its lofty tariff walls as part of her contribution to a saner world, the Empire should on its side modify Imperial Prefer- ence to the extent of allowing American farms and forests a share of the British market.
Washington does not, of course, challenge the principle of Imperial preference any more than Mr. Hull would deny that his policy has the sanction of American self-interest as well as. of wider policy. It has, in point of fact, recog- nised Imperial Preference in the Canadian Treaty. It recognises also that what it asks of Great Britain in the way of trade concessions does raise difficult problems for the countries of the Empire and especially for Canada. It regards a strong Great Britain and a close-knit British Empire as of the greatest moment to the future of democratic civilisation and realises that a planned and balanced economy is just as important to the Empire as it is to the United States or any other single country. But it is earnestly hoped that it will prove possible to dovetail a somewhat freer-trading Anglo-American relationship into the structure of Imperial Preference, that the British capacity to consume primary products may be sufficient to allow for the con- sumption of some farm and forest products from the United States as well as from the Dominions, just as Canada has been able to reduce duties on Ameridan manufactured goods without disloyalty to the Imperial bond. On her side the United States has, in the negotiations, shown herself ready to reduce her tariff on woollens, clothing and other manufactured British goods in the same way as, to promote the Canadian agreement, Mr. Roosevelt risked the dis- pleasure of the farmers by making concessicns on agricul- tural products.
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