SCANDINAVIA AND FREER TRADE
Commonwealth and Foreign
By T. G. BARMAN
SroeKnoLst, January 2511,.
THE acceptance by Hr. Sandler, the Swedish Minister for Foreign Affairs, of Mr. Eden's invitation to visit London next March as the guest of the British Government is good news indeed. Since the Swedish Social Democratic Party took office in the autumn of 1932 Hr. Sandler's reputation as Foreign Minister has steadily grown : a winning per- sonality, a quick and courageous intelligence, and diplomatic gifts of the first order have won him a place among the front rank of European statesmen. He has, indeed, become one of the great moral forces at Geneva. He first met Mr. Eden at one of the meetings of the League ; their acquaintance soon ripened into friendship ; and in 1934 Mr. Eden, then Lord Privy Seal, accepted Hr. Sandler's invitation to visit Stockholm. Hr. Sandler is now returning the visit.
Yet it is widely hoped in Sweden that Hr. Sandler will do more than pay a courtesy visit to the British Foreign Office, and there is a general desire that he should try to get the support of the British Government for a well-organised attack upon existing trade barriers. Since Dr. Colijn, the Prime Minister of Holland, launched his now famous appeal for closer economic co-operation between the democratic States, the feeling has grown throughout Scandinavia and the Low Countries that the time has come to strike a blow for freer trade. The first moves have already been made : Hr. Hansson, the Prime Minister of Sweden, in a public reply to Dr. Colijn said that his appeal " had not fallen on deaf ears," and that all Swedes would " welcome any pro- posal for strengthening economic contacts between Sweden, the other Scandinavian States, Holland, Belgium and Swit- zerland." Shortly after, Dr. Colijn suggested that an early meeting should be called of the States-members of the Oslo Convention—Holland, Belgium and Luxembourg, Denmark, Sweden and Norway. To this Hr. Hansson, Hr. Stauning, the Danish Prime Minister, and Professor Koht, the Nor- wegian Foreign Minister, returned favourable replies.
The ground was thus well prepared for the visit, which had long since been arranged, of the Dutch Ministers of Com- merce and Agriculture to Norway and Sweden. This visit, which ended on January 24, has carried matters a stage farther : detailed discussions have taken place on the possi- bility of increasing trade between Norway and Holland, and Sweden and Holland, and it is expected that some, at least, of the Dutch quotas will soon be suppressed. The door has been opened to a revival of the Oslo Convention, and to some increase in the volume of trade between its members.
But the Oslo Convention is not enough. Even if the countries concerned could establish a preferential low-tariff area—and the British Government make this impossible by insisting upon their full rights under the most-favoured- nation clause—the total volume of trade between them could not easily be increased much above its present level. Even in the best case the trade of one member of the Oslo group with all the others combined does not exceed one-fifth of its total foreign trade. It is true that their total international trade exceeds that of any Great Power, save only Great Britain and the United States of America ; but their interests are so diverse that it is hard to conceive of their joining together for the purpose of using their combined resources and purchasing-power as bargaining instruments.
That " collective drive " towards freer trade of which Dr. Colijn has spoken cannot take place unless the British Government is persuaded to play its part. Great Britain is Sweden's, Norway's, Denmark's and Holland's best customer ; taken together they buy more British goods than any other country, not excluding the Indian Empire. And an agreement with Great Britain for some lowering of trade barriers would have the effect not only of increasing trade between the countries concerned, which between them control an important part of the total internationfil commerce : it would have a stimulating effect on the whole world. By strengthening the foundations of prosperity in the democratic States, a reduction of trade barriers would make a vital contribution towards the maintenance of peace. Viewed in this light British commercial policy is at least as much the concern of the Foreign Office as it is of the Board of Trade and the Department of Overseas Trade.
Dr. Colijn has made it plain that he does not believe that a full-dress Economic Conference would serve any useful purpose at the present moment, and that the best. hope of success lies in more or less informal discussions between the parties concerned. Swedish official opinion shin res this view. It is felt that the problem might best be tackled by first examining currency restrictions and quotas in the hope of getting them modified or even suppressed. These two trade barriers are much more serious obstacles to trade than tariffs, which, after all, do not entirely stop goods from coming into a country. The Danish currency restrictions, in particular, arc viewed with concern in Sweden ; not because of their effects on Swedish trade (the figures do not give serious cause for complaint), but because they arc con- verting Denmark into a completely State-controlled economy, and thereby weakening the links which tie the country to her Scandinavian partners.
It is recognised that so long as the British Government refuse, in principle, to acknowledge any deviation from the most-favoured-nation clause, Denmark may be compelled to maintain her currency restrictions and the import licence system, in order to give effect to the terms of the Anglo- Danish Trade Treaty. But it is felt that the British Govern- ment do not perhaps realise the full effects of the system : under pressure from countries more ruthless than Great Britain it has. become a source of weakness rather than of strength to the Danish Government in their negotiations with foreign countries. Germany, for example, has succeeded in imposing upon Denmark a trade treaty which would never have been accepted under a normal economic regime. In this way a totalitarian State which has already succeeded in establishing a measure of political influence over sonic of its neighbours in the south is enabled to extend its economic dainination in the north. Moreover, the Danish control system has developed into a neo-protectionist instru- ment which has made it so easy to give protection to new and often uneconomic industries that the country is rapidly reaching the point where it will have to choose between devaluation and deflation. So concerned is Swedish opinion over recent Danish developments that there is widespread support for the suggestion that the country should be given a large loan to help her abolish most of the present restrictions. But that can only be done after a successful attempt has been made by the Danish and British Governments to find new and less dangerous way of implementing the Anglo- Danish Trade Treaty.
These are some of the thoughts which now sway Swedish minds. It would be an impertinence to try to forecast the subjects which Mr. Eden and Hr. Sandler are to discuss when they meet in London. But it is safe to say that Hr. Sandler would have the overwhelming support of Swedish public opinion if he drew Mr. Eden's attention to the importance of striking a blow for freer trade without delay.
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