Great Britain and Europe
IT is welcome news that a new commercial treaty with Rumania is to receive this week the British signa- ture. By this treaty British imports will be placed on an equal footing with those of Continental nations, and indeed in some eases will secure better terms. There are also interesting agreements for Anglo-Rumanian co- operation with regard to shipping and transport, one of these being the planning of a new route to Egypt by fast steamer from Constanza to Alexandria.
Here is an example of what is being achieved, quietly and without fuss, by committees of the Government such as the Overseas Trade Development Council, with the co-operation of the most far-sighted and unprejudiced among our industrialists. It confirms and illustrates the conclusion of the Committee of Inquiry into British trade and industry, presided over by Sir Arthur Balfour, which
after four years' close examination reported that :-
"Broadly speaking, and with relatively insignificant exceptions, British goods are admitted into foreign countries on terms at least as favourable as those applicable to similar goods imported from other foreign sources."
This proof that Great Britain loses nothing from its Free Trade position—i.e., with no means of " retaliation "- cannot be gainsaid. Mr. Baldwin's weapon of retaliation, on the other hand, we are convinced, would have the effect of a boomerang which would plunge the whole trading system of this country into confusion.
So far from Continental Europe flooding this country with imports, and then taking cover behind its tariff walls—as is implied in the propaganda of the Empire Crusaders—the facts are that imports from Europe between 1927 and 1929 (the last two years for which figures are available) rose by some £7 millions, and exports to Europe showed an increase of £13 millions. For this reason we notice that none of the responsible champions of European Union even consider the exclusion of this country from Europe. Since the several parts of the Empire actually purchase not much more than 40 per cent. of British goods, the folly of provoking an economic conflict with foreign nations purchasing the other GO per cent. of our exports is only too evident.
There is one point about the recent clamour for Empire Protection which deserves to be stressed. It is, as we have pointed out before, our old friend " Safety First " in disguise. Many of our business men shirk the special difficulties of trading advance in the European or the South American markets—the Englishman's deficient training in modern languages to which we referred last week is a ease in point; they take what they conceive to be the line of least resistance in seeking a remedy for their trade troubles in the " sheltered " markets of the Empire ; and, in their satisfaction at thus sparing them- selves that hard thinking and exercise of imagination -which alone can retrieve the fortunes of British trade, they seem to ignore the fact that, as compared with Europe, the Empire is not—and for many years to come cannot he—an expanding market.
This short-sightedness is not by any means peculiar to Great Britain. Empire Protection, to call the thing by its true name, is, after all, only economic nationalism writ large. The Continental nations since the War have similarly followed the line of least resistance and, instead of creating new markets, have struggled against one another hopelessly for those already existing. At last, however, the folly of this cut-throat competition—taking the form of State help for certain industries, export bounties and various forms of more or less disguised Protection—is being recognized. That is the message Of the German reply to M. Briand's Memorandum on the Federal Union of Europe, and the same conclusion is
being drawn by the economic interests in all those Euro- pean countries that have suffered from the political nationalism of the last ten years. One of the most hopeful signs of the times was the recent foregathering of repre- sentatives of Rumania, Hungary, and Yugo-Slavia, to promote schemes for the marketing of their common agri- cultural products, to supersede the agrarian legislation which has simply had the effect of dislocating production.
Too many Englishmen still, when they talk of Europe, think only—as a writer pointed out in the Spectator last week--of the countries we fought with or against. Their horizon, like that of Sir Austen Chamberlain, is bounded by Loearno. Only a few take any interest either in the Scandinavian or Baltic countries on the one hand, or in the Balkans. Yet we certainly cannot afford to neglect the East and South-Eastern regions of Europe. Thera you have had since 1918 nothing less than an economic revolution. A hundred million peasants freed from their former serf-like condition have become small-holders. They are potential buyers for industrialized Western Europe—perhaps the most profitable field left in an over- exploited world. But they lack both the equipment and working capital necessary to raise their state to what we conceive to be a decent living, they lack, above all, purchasing power. An admirable book on economic conditions in Europe was published recently in France,* the author taking for his text the disparity between the two Europcs that lie on either side of a line drawn roughly through Stockholm, Dantzig, Cracow, Budapest, Florence, Barcelona, Bilbao, going right round France between England and Ireland, and passing through Glasgow, Bergen, and so back to Stockholm. What he calls Europe A is this industrialized belt built up on " horse power plus coal." He sees that electricity is the great source and purveyor of wealth to-day. " Le desequilibre que le cheval-vapeur a provoque, c'est le kilowatt qui le supprimera." This should be read in con- junction with the scheme for linking Europe by electricity proposed by Dr. Oliven at the recent World Power Conference in Berlin (The Times, Saturday, June 21st). It is difficult to resist Mr. Delaisi's conclu- sion that " the salvation of Europe lies in a return to Europe."
We are convinced that some such idea of redressing the economic balance as between the industrialized and the non-industrialized countries of Europe is behind all the schemes for a " United States of Europe," not least that of the Quai: d'Orsay. That France would fain assume the leadership in this economic revival is very clear. Why else indeed should she so obviously persist in draining gold from the Bank of England, and be so eagerly setting about the creation of her own Money Market ? It is time then to warn those who are being bemused by the prevalent Empire and Protectionist palaver not to lose sight of the far more important potential harvest for British trade in Europe, and to encour- age those who hare realized that in Europe—and in Spanish America—lies the great hope for the revival of British trade. We do not want to see insensate rivalry between the industrial nations whose eyes are set on Eastern and South-Eastern Europe. What we hope to see—through negotiations under the auspices of the Economic Committee at Geneva—and the B.I.S.—is an agreement among the interested European nations as to credit conditions, sale and transport of products—in short, a rationalizing of markets such as was advocated by " Omega " in the Spectator early this year.
Les Dear Europe's. By Francis Delaisi. (Payot, Paris. 20 frs.)