What We Have Gained From Ottawa
BY THE RT. HON. L. S. AMERY, M.P.
,Sir Andrew McFadyean will write next week an "Ottawa: the Other Side."
THE SPECTATOR asks me to say what we have gained ,from the Ottawa Conference. The first credit item to the account of Ottaim is that it saved for us an existing system of Imperial prefer- ences of immense importance to our trade. To estimate the value of those preferences we have only to look at the figures, not of the last year or two of depression and emergency trade restrictions, but of a normal year like 1928. In that year the British Empire took .1275,650,000 of British manufactures out of our total export of £578,869,000, or 47.7 per cent. In that year Canada bought from us £34,300,000, as against £46,600,000 bought by the United • States with more than twelve times her population. : Australia and New Zealand together, with a population of 7,500;000 bought from us more than France, Belgium, Italy, Spain and Portugal, with 116,000,000. people ; more than all foreign North and Central America, with nearly 150,000,900 ; - more than -China, Japan and the Dutch East Indies, with 500,000,000. These figures are, I think, sufficient both to show the influence of ,Dominion preference and.to refute.the charge, based on a few selected items, that preference has meant very little because the _duties against us have in any case been . almost prohibitive. What is true, however, is that, in the absence of any assistance on our part to their primary production, the natural tendency for industrial develop- ment in the. Dominions was prematurely accentuated, a process still further forced upon them by the world depression of the last few years. Most serious of all was the certainty that if the Ottawa . Conference had failed the whole .policy of Empire preference would have been finally discredited in the eyes of the _public in the Dominions, and would.. have been abandoned.
That crowning . disaster, at any rate, was averted. • The second credit item to Ottawa is the-fact that in the agreements there • concluded the existing system of preferences was greatly extended and secured for five years ahead. Space precludes me from attempting to go into the agreements in detail. The Canadian schedule of additional preferences certainly constituted a very important - reduction, so far as our -trade is eon.; cerned, of 'the high duties - of recent years. Not the least 'remarkable feature in it is the extent 'of the free ' which' 'is accoinpanied by preferences of • from 10 to 30 per cent., without which it would, of course be oflittle or no value to us in face of foreign Competition: The •AnStralitin contribution to the common cause was, in the main, a sliding -scale formula, increasing the actual 'preference from an 'average of Sortie 121 per cent: to from 15-20 per cent. New Zealand, 'whose preferences already in most' 'eases stood as ' high - as 20'. per cent. and over, pledged herself to retain that -margin, to reduce certain exceptionally high duties, and to exempt United Kingdom goods from surtax. The'South African preferences, though on a smaller scale, still represent a substantial improvement on the existing schedule, and no less important, both in principle and in piaetice,' was the fact that South Africa undertook to release herself from the -obligationS of any. foieign treaties which might hamper her freedom in carrying out the preferences agreed upon. Not least significant in the whole series of agreeinents was that with India, both because it marks the first substantial establishment of the system of preference in the Indian Empire, arid' because it shows that Indian legislators. have been prepared to undertake responsibility for a policy of Empire co- operation.
The third credit item is that in three of the most important agreements, namely, those with Canada, Aus- tralia, and New Zealand, it has been agreed that tariffs within the Empire should be based, not on an arbitrary and unlimited protectionism, even if modified by some degree of preference, but on the principle of fair competi- tion subject to allowance for " the relative cost of eco- nomical and efficient production, provided that in the application of such principle special consideration shall be given to the case of industries not fully established." The working out of_ the principle is to be left to impartial tariff boards before which British importers will be entitled to be heard.
We shall be told, of course, by the opponents of the Ottawa policy that these credits •have only been secured at the cost of even heavier debits, and that we have sacrificed the interests of. the .United Kingdom both by the imposition of burdensome duties at home, and by depriving ourselves of the power of negotiating for freer trade with other countries. To the second charge I would only reply • that, while we have secured at Ottawa specially favourable terms which we certainly could not have secured if our preferences were also to be given to the rest of the world, we still remain, subject to the Ottawa agreements, in a position of complete freedom to negotiate with other countries. Their eagerness to come here certainly does not suggest that in their opinion Ottawa has left no room for special arrangements. To the former charge I would reply that the duties we have imposed, so far from being sacrifices, are measures which it was in our direct interest to impose once we were assured of really effective preference in Empire markets. To-day we have no greater interest than the strengthening of those markets by contributing to their development, to their capacity for absorbing new population, to their purchasing power.
In any case, a very great part of the preferences which we have agreed to give to the,Dominions at Ottawa are also preferences given to our own agriculture, and for that reason again, worth giving for their own sake. It is on this side, indeed, that what our delegates agreed to is most open to criticism on the ground, not of excessive concession to the Dominions, birt of inadequate regard for British agriculture. Most regrettable, in particular, was the decision to refuse any preferential duties on meat. For this decision there was absolutely no justification on merits, as the British Government did formally commit itself to the policy of , raising meat prices by restriction, and has, indeed, gone further with that policy since. It was due to a purely irrational political. inhibition for the sake of which we are at this moment making a present of increased meat prices to foreign producers, and denying to our own over- burdened taxpayers many millions a year of revenues whiCh those foreign producers would pay if an import duty were imposed.
I come, finally, to my last, and greatest, credit item from Ottawa. It is that Ottawa marked a turning-point in our history, and, indeed, also in that of the world. The crisis from which the world is suffering to-day ha's arisen from the attempt to restore economic international- ism in the monetary sphere side by side with the con- tinuous intensification of economic nationalism in the sphere of trade and industry. That breakdown is, I believe, permanent. There is no possibility of restoring real internationalism, i.e., general free trade in the sphere of production, nor of restoring a universal gold standard. On the other hand, the ever-increasing sub- division of the world into small water-tight compartments is an equally impossible policy.. The only solution lieS in a compromise which, by the closer association of groups of nations which are prepared_to work permanently with each other, satisfies both the instinct of a -wider nationalism, and the economic need of the world for large markets, for highly-diversified sources of supply, and for a wide range for trade and investment. The Ottawa Con- ference has established the beginnings of such an economic group of which the solid kernel will alwayS be the Brit ish Empire, though it may be to some extent enlarged by the adhesion, through special trade agreements and by accep- tance of the ;terling system, of other States which for one reason or another may wish to be permanently associated with the British economic system, rather than with such other group systems as may constitute theinSelves in the future. It is in this respect that I believe the British Empire has at not only begun to save itself by its exertions, but to help the world to save itself:by following our example:
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