Evening star., 1949-04-17

q IN excessive QuauLlLleS ano the
to be sold in the United States
at relatively low cost. But even
now much Of the dairy produc-
ton is wasted. because the guam
titles available exceed the demand
by far and Britain keeps only a
crack of its import door open.
/ The French argument that the
ERP agreements provided specif-
ically for the absorption Of over
production had no effect on the
stubborn British economic dicta-
tor, who remained adamant in
his view that the gates of Britain
must be kept closed until such
time as he decides that the aus
terity policy can come to an end.
/ Under these circumstances Eu-
ropean countries are preparing
to dump their surplus production
on the United States. Britain is
expected to join them by offering
the American people whisky and
Leather goods at far lower prices
than we are paying today
The reason this program has
not yet been adopted is that
American tariffs are still high and
the Europeans expect that the
United States may decide to lower
them through reciprocal trade
agreements. But even If tariffs
are not lowered by next summer
we must expect an avalanche Of
luxury goods in this country,
manufactured by the Europeans
Prices may be cut sharply.
From the point Of view Of the
American purchaser who is &C
customed to luxury goods this may
be good news. But American
economists frown at the idea of
an influx of foreign goods into
the United States at this time.
New Textile Crisis
Our own textile industry is in
the midst Of a new crisis. Re-
ports from New England and some
of the States in the South indi-
cate that mills are slowing down
considerably. The distillers over
the Nation are disturbed by the
fact that they will have to meet
the competition of Scotch whisky
and French brandies at a price
lower than the cheapest Amer
ican product. Growers in Cali
fornia, New York and Ohio will
worry when they hear that
French and Italian wines and
champagnes will be offered in
the American market at prices
with which American producers
will have difficulty competing.
The legislators who approved
ERP were assured at that time
that there was no serious risk OF
European dumping" in the Amer
lean market, since it was pro-
vided in the agreement that the
signatories would absorb the over
production of each other.
Because of certain .considera-
tions of politico-s strategic ma
ture Europe was not provided with
tools for her heavy industries. But
since ERP was not regarded as
another UNRRA, and its purpose
was to put the beneficiary nations
on their feet economically. we did
provide them with the machinery
to start the wheels of their light
industries again. This has been
done and has succeeded more
quickly than was anticipated.
Unfortunately only a limited
market is provided in Europe it
self. South America is able to
use only a small part OF Western
Europe's output and Asia provides
no outlet at all. In the days be-
fore the war luxury and SEMI
luxury goods had a fair market in
some parts of China, Singapore
and India. These now are COM
pletely closed.
The only present outlet for
Europe's goods is the United
States, which will have to alb
sorb more than it did before the
war If it is to avert an economic
crisis in Europe. This comes at
time when he faces less ad-
vantageous position than we-held
in the past, confronted with an
industrial and economic recess
sion and heavier taxes than
before.
Frank Talks Urged
Thus the fears of some op-
ponents of the Marshall Plan may
be borne out. That is to say.
after we have provided Europe
with the means to stage q limited
economic comeback, we shall have
to consume the goods which We
have helped Europe produce,
probably at the expense Of Ameri-
can labor.
The suggestion is being made
in some quarters in Washington
that the administration talk
frankly to the British government
and warn them that they must
live up to the agreement which
provides for unhampered ex-|
change of goods among the na-I
tions which benefit from ERPI
appropriations.
What success this will have is
uncertain. The British Labor
Party is worried about its latest
electoral setbacks and is intent
on proceeding with even greater
naturalization of some indus
| tries within the next two years.
During that time 1t feels that It
must stick to the austerity pro-
/ gram, which Is part and parcel Of
its closed economic policy. A
lchange Of attitude might leopard
1ize its position as the government