T HE PARIS ECONOMIC CONFERENCE. T HE Economic Conference of the Allied
Powers has at last met, and is at this moment at work. On the whole, little, if anything, has been lost by the frequent postponements which have occurred, although on personal grounds most people will regret the absence of Mr. Runciman through his unfortunate illness. The task before the Conference is one of great importance, but hedged around with difficulties. Leaving aside the purely temporary purpose of settling upon arrangements for blockading German trade during the war, the main business of the Conference is to organize methods for preventing, after the war, Germany's resumption of her past commercial methods. On the importance and the desirability of this object we are all of us agreed ; but only harm will result if we deliberately shut our eyes to the diffi- culties to be overcome, and imagine that the end• can be achieved by mere shouting. Looking at the problem in the first instance from the point of view of British opinion, we have to recognize that the old shibboleths can no longer be invoked by either party to past fiscal controversies. On the one hand, as has been constantly urged in these columns, Free Traders must frankly acknowledge the fact that principles which they regarded as demonstrably sound under peace con- ditions are not applicable under the conditions of quasi-warfare, which will certainly continue to exist when the present war comes to an end. It is equally important for Tariff Reformers to remember that their primary conception of Protection for the home market conflicts fundamentally with schemes for combined action on the part of the Allied Powers. In laying down this second proposition it is important to make our own position perfectly clear. We entirely repudiate the idea that either France or Russia, while maintaining her Protective system against us, has any right even to expect that we should necessarily maintain a free import system for her benefit. We do not claim any right to interfere with their domestic arrangements, and we may assume that they equally recognize our right to establish domestic Protection for ourselves if we should decide that it is in our own interest so to do. The point is that it is almost impossible for British Ministers simultaneously to work for joint action with our Allies against Germany, and also for domestic Protection against those Allies. In turn, when our Allies come to consider how practically to establish working arrangements with Great Britain for defence against the common enemy, they will probably find that their system of domestic Protection seriously hampers their freedom. Whether they will be able in practice to modify that system in the face of internal political pressure is another matter.
The same considerations apply to our own Dominions, and the same difficulties arise. Both Free Traders and Protectionists in England have often dreamed of the desirability of establishing a complete system of Free Trade within the British Empire. We may be nearer to the realization of that dream than ever before, but we certainly cannot yet see it taking shape. In all the Dominions the Protectionist spirit is still strong. Hitherto all that has been done in the way of encouraging trade relations between different parts of the Empire has been through the establishment of Colonial preferential tariffs ; but in practice these tariffs have nearly always been arrived at, not by lowering the Colonial duties on British imports, but by raising the duties on foreign imports. In other words, the Dominions have hitherto followed the policy of domestic Protection even against the Mother Country and against one another, while increasing the scale of Protection against foreign countries. In saving this we are not blaming or criticizing the Colonial Governments ; we are merely noting the facts. At the moment it does not seem that either in France or Russia or Italy or in our own Dominions is there any great prospect of the abandonment of the policy of domestic Protection. Consequently the practical question which the Paris Conference has to consider is how far it is possible to fit in this policy of domestic Protec- tion with the wider policy of Allied action against the German enemy. On such a point no general principle can be laid down ; the matter is obviously one of detail, and the details must depend on future rather than on present facts. There is, however, one very important point which ought at once to be dealt with. If the Allied Powers are to take in the future common action against German commercial methods, they must have their hands free to impose tariffs upon German goods which they do not impose upon the goods of one another. That means that Germany must not be entitled to claim most-favoured-nation treatment.
This is of all points perhaps the most immediately important for the Paris Conference to settle. In the Treaty of Frankfort, which ended the Franco-Prussian War of 1870, there was inserted a permanent most-favoured-nation clause regulating the commercial arrangements of France and Germany. This clause was inserted at the request of France, but most French people seem to be agreed that it was Germany who drew the greatest advantage from it. At any rate, there is not likely to be any French opposition to a refusal to insert a similar clause in any Treaty of Peace that may follow the present war. Nor need there be any opposition from Great Britain. It is true that the most-favoured-nation clause, which forms part of our commercial treaties as well as of those between other Powers, has on the whole served us well. It may be, as is alleged, that in particular cases the Germans have dodged the obvious meaning of the clause by introducing extremely complicated definitions of goods, so as to obtain advantages for themselves, while denying them to the other contracting Power. Apart from this trickery, the clause has had the advantage of enabling our exporters to profit by any reductions in tariff that any other nations agreed upon between them- selves. Nevertheless, we must now be prepared to sacrifice that advantage, whatever it may have been worth. For unless the Allied Powers reserve the possibility of establishing preferential tariff arrangements among themselves, they will be able to do very little indeed to counteract German com- mercial methods.
Up till quite recently the question of preferential trading has generally been approached from the point of view of import duties. But it is clearly possible, and may even be more important, to deal with it also by means of export duties ; and one of the points which will probably be di,:cassed in Paris is the possibility of reserving natural products to the manufacturers of the Allied Powers by moans of a system of preferential export duties. Within the last few days, indeed, a definite suggestion in this direction has been made by a Government Committee which was appointed to deal with the question of the export of oil-producing nuts and seeds from our West African Colonies. This Committee, over which Mr. Steel-Maitland presided, has reported in favour of. the imposition of an export duty of not less than £2 a ton upon all seeds exported to ports outside the British Empire. The Committee was a strong one, and though Sir Hugh Clifford, Governor of the Gold Coast, and Sir Frederick Lugard, Governor of Nigeria, were unable to attend its later sittings in consequence of their return to West Africa, Sir Frederick Lugard expressed his approval of the Committee's main proposal. The question at issue, as the Committee clearly states, is one between Great Britain and Germany. In Germany before the war there existed a very active oil- crushing industry which obtained its raw material from British West African Colonies. A small portion of the same raw material was exported to Great Britain ; none went anywhere else. Since the war began the German trade has necessarily ceased, and the whole of the West African product now goes to Great Britain. The Committee fears that after the war the German Government will exert itself to recover this trade for the benefit of the German crushing mills, and the suggested Colonial export duty is proposed as a means of countering any fiscal devices which Germany may adopt. The Committee believes that the £2 duty will suffice, but recom- mends that if it proves to be insufficient it should be raised. At the same time, it realizes the danger of such a duty to the native producers. It might have the effect of so concentrating the trade in a few hands that the native producers would be at the mercy of the British merchant. In view of this danger, it recommends that the duty should only be imposed for five years, so that the matter could then be reconsidered. Subject to this important safeguard, the proposal seems sound. The only danger is that at the end of five years political pressure might be brought to bear by British seed-crushers through the House of Commons on the Colonial Secretary to maintain a duty in their interest against the interest of the West African producer. This is one of the rocks ahead directly a Government begins to interfere with the free course of commerce, and it would be as foolish for the country to forget the existence of such rocks as it would be for a mariner to sail without a chart showing hidden reefs. The main principle to be borne in mind. in all dealings with Dependencies is that the Home Government must act as a trustee for the people governed and not as a beneficiary. We have to govern over three hundred million people belonging to dependent races, and unless our policy is controlled by the principle that these dependants must be governed in their interest and not in ours, our title to maintain a world-wide Empire will be indefensible.
Leaving these considerations for the moment aside, we may take the palm-kernel trade as an excellent illustration of the way in which the Allied Powers can block out German trade by agreements among themselves. This method is even more desirable than the method of import duties at our own ports, for the danger of German commercial methods is much more serious in British Dominions and Dependencies across the sea than it is in Great Britain herself. There is overwhelming evidence that the German trader throughout the world has been used as an agent for the German Government, which is itself the agent of the German military party. If we can prevent the German from maintaining a foothold in our Dependencies and Dominions across the seas, we can control his movements with comparative ease in the United Kingdom. For this purpose, however, as well as for the purpose of common action in the matter of import duties, it is imperative that the Allied Powers should agree at Paris not to concede .to Germany after the war anything in the nature of a most- favoured-nation clause. That should be the sheet-anchor of our policy. It is what the Germans dread beyond all things.
Previous page
