The Press MONDAY, DECEMBER 13, 1937. Empire Trade and World Trade

Press, Volume LXXIII, Issue 22274, 13 December 1937, Page 8

The Press MONDAY, DECEMBER 13, 1937. Empire Trade and World Trade

The cable news of the last two days has contained three important items bearing on British trade policy, all of them indicating a growing interest in the trade discussions between the British and American Governments. One of them is a memorandum to Mr Neville Chamberlain by the influential Federation of British Industries opposing any formal agreement with the United States on the grounds that it would endanger the system of Imperial preferences. Another is a brief but interesting reference in the House of Commons to Great Britain’s increasingly adverse trade balance with those countries with which she has trade agreements—presumably the Dominions and the Scandinavian countries. The .third, and the most important, since it must indicate the trend of the Government’s thinking on trade policy, is Mr Chamberlain’s review of the results of the Ottawa agreements, made in the course of a speech at an Empire Unity Campaign demonstration. In Mr Chamberlain s view, the Ottawa agreements have been an unqualified success. Between 1932 and 1936, British imports from the Dominions have increased by 41 per cent., while in the same period British exports to the Dominions increased by 46 per cent. Mr Chamberlain rejects emphatically the view that the increase in Imperial trade has been offset by a decrease in trade with foreign countries, and quotes figures to show that in the five trade with foreign countries has increased substantially.'“ The increase in Imperial trade,” he asserts confidently, “ instead of diminishing, “ foreign trade, has added to the economic stab- « ility of the world and has therefore proved to “ be a stimulus to the international exchange of “ goods.” Such statements are difficult either to prove or to disprove. The Ottawa agreements became operative in what was, for most countries in the Empire, the Worst year ol the depression; their effects must therefore be judged against a background of slow general improvement in world trade and of profound changes' in trade policy in every important trading nation. To generalise with certainty is therefore impossible. Mr Chamberlain’s round figures are a selection from a mass of statistical material and indicate nothing more than the direction of his own thinking. It would be possible to make another selection which would show, or seem to show, that in fact the Ottawa agreements have restricted the natural growth of world trade since the trough of the depression. For instance, the “ Economist ” has shown that the increase in British imports of mutton, beef, lamb, bacon, and pork—products which bulk largely in the Ottawa agreements—from the Dominions has been offset by a much greater decline in imports from foreign countries, But it is perhaps better, in discussing the effects of the Ottawa agreements, to put aside istatistical niceties and keep to truths which are general and incontrovertible. And the truth which stands out most clearly is that, in spite of recent improvements, British trade and world trade are far below the pre-depres-sion level, whether the test is volume or value. The reason for this, as the present British Government has more than once admitted, is the growth of tariff and quota restrictions, in the depression years. To argue that the Ottawa agreements, the purpose and effect of which was the diversion of trade, are unlike all similar agreements and have not impeded the international exchange of goods is to plead an unconvincing special case. The real argument for the Ottawa agreements is that, over a restricted area, they ensure a reasonable stability of trade. But the mere fact that the Ottawa agreements hinder an expansion of trade between the two greatest trading nations in the world is a sufficient proof that this stability is being’paid for at a heavy pricis.