Evening star., 1938-10-21

Of motor cars, for example, which is
only one of a number of subjects un-
der discussion In England today there
Is an import duty of about 33 per cent
on the incoming cars. All countries
are on the same basis America would
like to see the duty materially low
cred. But England says, of course, this
would mean the admission of German
cars in larger quantity.
The way out, to be sure, if England
desires to do it, is to create import
duties based on horsepower classical
tions, because the American cars are
in the higher horsepower group. This
method of classification is permissible
under the Trade Agreement Act passed
BY our Congress.
British IndustrialistS Disagree.
This is but one of many items on
which there is disagreement. Nat
urally the division of opinion inside
the British government reflects differ
ing views among British industrialiSts,
some Of whom think the treaty would
be helpful and some of whom think it
would be dsadvantageous.
In the State Department here. on
the other hand, there is an insistence
on certain concessions which it is felt
are necessary if the trade agreement
is to receive the approval Of American
public opinion.
The Importance Of consummating a
trade agreement cannot be exaggerated
at this time. For the moment the
United Kingdom and the United States
agreements governing the relations of
the London government with the vari-
Gus dominion governments. 1t will be
recalled that when the HaWley-Smoot
Tariff Act was passed in 1880, there
was Immediately convened what was
known as the Ottawa Conference, at
which preferences inside the British
Empire were established by the English
government.
America started the high tariff
game, and, as the duties were put
higher and higher, the other countries
of the world imposed reprisals. Many
American companies found it neces-
sary to abandon their export trade
from the United States and to estab-
lish factories and branches In foreign
lands to manufacture or assemble
their products. In some instances
these companies found nationalistic
spirit so intense on the tariff question
that American ownership had to be
reduced to the minimum and American
management had to be supplanted
entirely by citizens of the other coun-
tries.
Cut American Employment.
So, while American firms in some
instances derive revenue from foreign
plants. it is very small compared to
what it used to be in the days when
export trade direct from the United
States was at its height Likewise,
American employment has been
severely cut down as consequence of
the building of American plants
abroad and the taking over of the
export policies of such plants by
foreign governments.
The program of Secretary Hull has
been q constant effort to reverse the
tide and bring back the employment
to the United States. This can be
done, he thinks, by gradually increas-
ing the volume of American exports
Reciprocity itself is in the nature of
Q trade, but it is not what is often
called barter or two-way agreement.
The United States does not, for in
stance, agree to give certain low duties
to Great Britain and not to the rest
of the world in exchange for low duties
for American products. Quite the
contrary. if the British give the
United States low rate, the same
rate applies to all other countries
from which British citizens may wish
to buy
BY this method Secretary Hull hopes
to bring about a gradual reduction
everywhere of tariff barriers 50 that
when impediments to the exchange OF
goods are removed, the total volume
OF goods bought and sold across in
ternational boundaries and oceans will
be materially increased.
There are advocates of the so-called
barter or two-way plan who insist
that direct bargaining is the better
method But the United States Gov
eminent under the Roosevelt admin
istration has stuck to the universal
application of tariff duties and to
what is known as the favored nation
principle, something which most of
the governments of the world now
recognize as the cornerstone of sue
cess in future trade relations, espec-
tally If economic nationalism-which
fosters barter as used by Germany for
instances to be supplanted by a
sane internationalism
Copyright. 1889