The Dominion MONDAY, JANUARY 6, 193O. FORCES BEHIND EMPIRE FREE TRADE

Dominion, Volume 23, Issue 86, 6 January 1930, Page 8

The Dominion MONDAY, JANUARY 6, 193O. FORCES BEHIND EMPIRE FREE TRADE

.. - A former French Premier, M. Herriot, has endorsed, in emphatic if somewhat vague terms M. Briand’s recent suggestion for the creation of a “United States of Europe.” The idea behind this somewhat misleading phrase is not new. It is a movement, no for a political alliance of the European States, but to create a system of mutual tariff treaties designed to lower the high and growing Customs barriers that are so gravely impeding the comment of Europe at the present time. . - . Whether any effective movement in this direction is possible remains to be seen. The dead hand of immemorial hatreds and the barriers of language press heavily on European .attempts at co-operation for any important purpose. If, however, European industry and commerce are to hold their own in face of American competition, some reversal of present Continental policies is essential • * The United States of America has an enormous competitive advantage in being practically a free trade continent, containing 1 millions of people separated by no tariff barriers whatever, and carrying mass production and distribution to the economic limit. Against this the multitude of petty hostile States in Europe, steadily making mutual trade intercourse more difficult by a rising system of Customs duties, can make no effective headway, and can bare!} hold their own domestic markets. ~ - n Any serious effort towards/a “United States of Europe will bring Britain to a parting of the ways where she will be forced to make a definite choice of economic policy. Geographically a part of the European system, Britain has had for centuries a. world Empire. * Aggregated, the resources of this Empire, economic and otherwise, are potentially greater than those of the American or ■European systems. ! There is hardly a commodity that the Empire could not produce for itself if need were. If a European tariff federation were formed with exclusive privileges against outsiders, Britain must .either enter into reciprocal relations with it, or endeavour to bring about some effective economic union in her at present unorganised and unwieldy Umpire. ( This is the actuating force behind the movement for Empire Free Trade” sponsored by Lord Beaverbrook and Lord .Melchett, but familiar in essence since the days of Joseph Chamberlain. .These men feel that further drift is fraught with danger. Britain has now fallen to third rank as an exporting Power, some of her prewar markets, notably in the Far East, are apparently lost beyond recovery, and for years there has been no buoyancy in her export trade. At the present time, also, inter-Empire trade is only a little more than a quarter of the aggregate external trade of the various portions of the Empire. Even in New Zealand the proportion of imports from and exports to Britain is diminishing at a disquieting rate. ' The problem is whether the drift can be arrested by means, of a system of free trade among the constituents of the Empire, combined with tariff discrimination against foreign countries. There are two lions in the path. Such a policy, effectively put into operation, involves two cardinal points. The first is the imposition in Britain itself of tariff duties on foreign as distinct from Empire food-stuffs and raw materials. The second involves the free entry into the Dominions of British manufactured products. Duties on food-stuffs and raw materials imported into Britain would almost certainly raise costs of production there at a time when it is most urgently necessary that they should be reduced. Removal of import duties on British manufactures in the Dominions means the virtual destruction of the industries which they have built up under tariff protection. It is improbable that either of these consequences will be accepted by the countries cohcerned. It is for the advocates of “Empire Free Trade” to show a way round or over 'these difficulties. If they can do this other perplexities will shrink into relative insignificance.