Trade Not Aid
AMERICA'S national penchant for eating its cake and having it was never better illustrated than by the . popular reaction to the slogan "Trade—Not Aid." - Oblivious of the fact that the phrase was a British import, Press and public -adopted it as a compact exposition of American policy. " It's about time," was the attitude, "that the European countries abandoned their reliance on American generosity and got busy saving themselves. They must be brought to realise that the only cure for their ills is work and more work, production and more production. Look at us ! We attained world pre-eminence by our own genius and industry."
Then, after this mild orgy of moral-pointing, came the chilly realisation that international trade is a two-way street.
Praiseworthy European efforts to increase exports became a nefarious plot to dump the product of cheap foreign labour on the American market. Foreigners, obviously, were not to he -trusted. Look at Holland, which had the effrontery to retaliate against the American quota-limitation on Dutch - cheese; and Switzerland, which actually threatened to cease buying Maryland tobacco unless America abandoned plans to levy a prohibitive duty on Swiss watches. And when Britain, foiled in its attempts to scale the American tariff-wall, turns to the Commonwealth. American exporters raise outraged cries of "Imperialism." Trade with Hongkong is rank treachery. To do business with Russia is an abomination.
The realities are understood by relatively few Americans below the highest echelons of Government and industry, but there have been a series of enlightened and reasonably suc- cessful efforts to lower America's tariff-wall ever since the enactment of the vindictive Smoot-Hawley tariff Act in the days following the First World War. The pioneer was far-sighted Mr. Cordell Hull, the late President Franklin D. Roosevelt's first. Secretary of State. His monument is the Reciprocal Trade Agreements Act, which he fostered, nurtured and hammered through a reluctant Congress. The effect was to lower the tariff-wall by as much as 75 per cent. over a period of twenty years with no noticeable ill effect on the American economy. But, as . frustrated British exporters know, the wall still is far too high, and it is topped by chevaux de frise of antiquated and purposely cumbersome customs-regplations directed at the exclusion of the foreign product rather than the collection of revenue. Attempts to overhaul the creaking wooden machinery of the customs service are gathering dust today in the pigeon- holes of Capitol Hill. American business-men, who today loudly proclaim their faith in the dogma of "trade—not aid,' are always resentful of accusations of economic isolationism. Yet efforts to increase trade by reducing customs-duties invariably start a chorus of agonised wails from the affected producers, backed by strenuous (and usually effective) wire- pulling by their Washington lobbyists. -General Eisenhower, more so perhaps than any other American, knows the vital importance to his country of economically strong friends. The President-Designate is pretty well committed to the doctrine of "trade—not aid," and can be expected to strive for the liberalisation of America's trade- policies. His instrument is ready to hand. It is that same Reciprocal Trade Agreements Act, which comes up for renewal and possible expansion next June. There are indications that opposition will be loud and strong from both inside and outside Congress. The Republicans are traditionally the pro- tectionist party, and the recent election gives no reason to believe that the tradition has been jettisoned. Indeed, the economic isolationists have acquired a new ally—the nominally democratic and hitherto free-trade South. A substantial number of southern Congressmen no longer represent an agrarian community looking elsewhere for its consumer goods. Because of the recent and continuing migration of industry from the North East, they now legislate for a young and vigorous industrialisation demanding protection against foreign competition.
This new coalition of republican and democratic protec- tionists may not be powerful enough to kill the basic Reciprocal Trade Agreements Act, but it probably will be quite powerful enough to prevent its expansion and liberalisation. And, the American system of government being what it is, there can be no assurance for foreign exporters that, even if they capture a beach-head on the American market, they will not later be driven off by subsequent prohibitive duties, subsidies, or import:- quotas. It is by no means certain, therefore, that the new Administration will get from Congress the power it will need and must have if America's allies are to be permitted to attain self-sufficiency through "trade—not aid."
A resolute effort is being made to solve the problem by teaching the American voter the economic facts of life. Such eminent bodies as the National Association of Manufacturers, the National Farmers' Union and the Congress of Industrial Organisations (the American Federation of Labour is still sitting on the fence) are initiating comprehensive programmes of public enlightenment. Another group, the Detroit Board of Commerce, has actually proposed abolition of all tariffs every- where, and has called on American business to forgo the chance Of greater immediate gain for the ultimate enrichment of the entire family of nations.
The State Department, in a down-to-earth object-lesson for the man in the street, has contributed a pamphlet detailing the mythical misfortunes of a mythical though typical American family in an America deprived of imports. It is a bleak and unamerican America for Jim Johnson, whose employers have shut down their steel-mill for lack of certain essential alloys. Seeking solace in a cigarette, Jim finds that American " gaspers " unmixed with imported tobacco are tasteless. His morning coffee is missing; his television-set yields only unrecognisable patterns; he has no telephone (because forty-eight imports go into the making of the instrument). He cannot, for precisely similar reasons, replace his worn-out motor-car. The discomfiture of the Johnson family is capped by Mrs. Johnson's inability to buy her cosmetics and the fractiousness of the little Johnsons deprived of bubble-gum.
"So what ? " comments the mass-circulation New York Daily News in its review Of the State Department's publication.
Dismissing it as British propaganda inspired by Mr. Dean Acheson, Colonel McCormick's tabloid influence-moulder concludes that American ingenuity soon would fill the gaps without any help from the ' outside world. Would it ? Experience, as• always, 'Will' prove the best educator. Sooner or later it will show Americans they must share the rake or succumb to indigestion.
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