The Press THURSDAY, JUNE 16, 1960. U.S. External Trade

Press, Volume XCIX, Issue 29232, 16 June 1960, Page 12

The Press THURSDAY, JUNE 16, 1960. U.S. External Trade

The reduction of the United States’ balance - of - payments deficit is good news for all the free world. Since 1945 the nonCommunist countries have relied heavily upon American financial support for their economic rehabilitation, development, and military security. The trading difficulties that resulted from the post-war dollar shortage and the weakness of sterling have begun only comparatively recently to affect the health of the United States economy. By the restriction of dollar imports and the vigorous encouragement of exports, the United Kingdom Government solved its own problems of foreign exchange; and sterling has regained its traditional status as a stable trading currency. Perhaps ironically the Americans, in attempting to redress their external trade balance, are beginning to copy British methods of stimulating export sales. When the United States announced its export drive in March the American Ambassador in London (Mr John Hay Whitney) said the organisers would “profit enor- “ mously from the experience “of the British Dollar Exports “ Council ”. A good deal has been done in Britain and other Western countries to liberalise policies on dollar imports; but the high prices of American goods do not enhance the prospects of successful competition. Nevertheless, an increase in the flow of American exports, even if only in a small, marginal range, will be in the interests of both the United States and its customers. The chairman cf Lloyds Bank (Sir Oliver Franks) last January welcomed the better distribution of the world’s gold stocks that had resulted from American deficits in 1958 and 1959, but he warned that the United States “cannot “ live with a deficit on this scale “ for long ”. If nothing was done to ease the pressure on the dollar, said Sir Oliver Franks, the Americans might “try to “shrug off their difficulties by

“a large and violent lurch in “ policy ” —a sharp cut in foreign aid or a swing back towards protectionism. Recently President Eisenhower appealed for Congressional endorsement of a mutual security programme costing 4175 million dollars for the incoming fiscal year; but the amount voted will fall far short of the President’s request. This type of expenditure, vital to the progress of the free world, will continue to be vulnerable politically unless America’s external trade improves. The constant danger of protectionism was exemplified for New Zealanders this year by the attempt, unsuccessful though it was, to prevail on the United States Tariff Commission to recommend higher duties on lamb and mutton imports. So far the United States Government has concentrated its endeavours on widening trading opportunities in Europe and elsewhere, and it has avoided introducing major restraints on imports. During the first four months of 1960 commercial exports, at 6307 million dollars, were 22 per cent higher than in the corresponding period of 1959. Imports for the same period were up by only 6 per cent to 5058 million dollars. Thus on merchandise trade alone the four months yielded a surplus of 1249 millicm dollars—more than three times the figure .“or January-April, 1959. The “New “York Times” on June 8 emphasised that the improvement in merchandise trade, “ while of dramatic propor- “ tions ”, did not hold the answer to solving America’s international payments difficulties. However, continued the newspaper, the current trend was encouraging because it was based “not [on] the backward- “ looking method of imposing “trade restrictions of one kind “or another, but [on] the “healthy process of expanding “ the world’s volume of our “ international trade and pay“ments”.