U.S. ECONOMIC POLICY

Press, Volume LXXXIX, Issue 27010, 9 April 1953, Page 9

U.S. ECONOMIC POLICY

Eisenhower Plans Re-Examination (N.Z. Press Association—Copyright) (Rec. 11.30 p.m.) WASHINGTON, April 8. President Eisenhower’s request to Congress for a one year extension of the Reciprocal Trade Agreements Act has set the stage for a Congressional battle over tariff protection against foreign trade competition, Reuter’s diplomatic correspondent said today. The high tariff protectionists, mostly within the President’s own Republican Party, are mobilising to fight the trade law and at least weaken it with crippling amendments. The law was designed to permit the State Department, in negotiation with European and other trading nations, to agree on mutual tariff reductions to stimulate international trade. Reuter’s correspondent noted as significant, Mr Eisenhower’s request that the reciprocal trade programme—which expires next June—be extended for only one year instead of the usual two years.

The reason given was that this would permit a temporary continuation of the programme pending “a thorough and comprehensive re-examination” of the economic policies of the United States. But many Washington observers are convinced that the President has settled on this minimum extension in the hope of weakening the strong protectionist threat to the continued existence ol the whole programme. Mr Eisenhower said in a special message to Congress yesterday that the proposed 12 months’ extension of the act was an interim measure. “As such,” he said, “it will allow for the temporary continuation of our present trade programme pending the completion of a thorough and comprehensive re-examination of the economic and foreign policy of the United States. I believe that such a reexamination is imperative in order to develop more effective solutions to the international economic problems today confronting the United States and its partners in the community of free nations.”

Mr Eisenhower said * United States trade policy was only one part, although a vital part, of a larger problem. “This problem,” he said, “embraces the need to develop, through co-operative action among the free nations, a strong and self-supporting economic system capable of providing l?oth military strength to deter aggression and rising productivity that can improve living standards.

“Security Dependent on Economic Health” “No feature of United States policy is more important in this respect than the course which we set in our economic relations with other nations. The long-term economic stability of the whole free world and the overriding question of world peace will be heavily influenced by the wisdom of our decisions. As. for the United States itself, its security is fully as dependent upon the economic health and stability of the other free nations as upon their adequate military strength.” ' Mr Eisenhower said that a careful study of these intricate relationships had to be made in order that a sound course could be charted for the nation. “The building of a productive and strong economic system within the free world—one in which each country may better sustain itself through its own efforts—will require action by other governments, as well as by the United States* over a wide range of economic activities.” He said these activities must include:

(1) The adoption of sound internal policies. (2) The creation of conditions fostering international development. (3) Assistance to underdeveloped areas. (4) Progress towards the freedom of international payments and the convertibility of currencies. (5) Trade arrangements aimed at the widest possible multilateral trade.