Tariffs: a World Affair

Dominion, Volume 25, Issue 172, 16 April 1932, Page 18

Tariffs: a World Affair

IN CALLING for a “permanent” international conference on tariffs, the United States Tariff Bill, which has heen adopted by the Democratic majority in the House of Representatives, and is now before the Senate, offers a sharp challenge to the prevailing economic nationalism (says the "Christian Science Monitor”). For some time past it has been thought that the United States has been reverting to a narrow isolationism. Here is an example to the contrary. If there is one thing on which nations have jealously guarded their sovereignity, it is the matter oi tariffs, and it is cause for rejoicing that so important a body as the House of Representatives should ask the world to retrace its steps, and to think of tariffs internationally. How far this resolution marks progress may be gauged from the attitude laid down at the Pan-American Congress in Havana in 1928. The chairman of the Argentine delegation offered a resolution which to some extent would have made tariff-making a matter of international concern. Mr. Charles E. Hughes, head of the United States delegation, disposed of the move in these words: In our discussions, it appeared that the United States of America did not cherish, its sovereignity any more than the oilier American republics cherished theirs. The right to protect the people of a country in determining what goods shall enter a country, what duties shall he imposed, is of the essence of sovereignity. Each of our countries has provisions relating to the import and export of products and raw materials, which it thinks are essential and well devised. They may he debated, they may be the subject of internal discussion, but the legislation in these respects, through the parliaments or congresses of the nations, represents the sovereign will. Therein Mr. Hughes summed up the views entertained not only by the United States, but by the nations at large. But in days past, the same answer was given to proposals allowing for the international regulation of national navies. If the making of tariffs was the “essence of sovereignity.” surely that of navies was not less so.

However the nations started to discuss the size of their navies in common, and so far has national sovereignity been abated in this respect that at the forthcoming Disarmament Conference the nations will deliberate upon the size of the other arms of their national defence.

The reason for this change of heart is-plain. The effect of national armament does not end with national borders. It has profound repercussions on the armaments of other nations. It promotes world insecurity, for a navy is not only a force for policing territorial waters and defending coasts, but. may be used also for attack. Thus other nations consider it a potential threat and feel compelled to build for defence against it. Apply the same reasoning to tariffs, and the case for international discussion is at once apparent. Tariffs are levied against the goods of other countries in defence of the home market. They would have no international effects if tlie tariff-making country were not trying at the. same time to sell its own goods to those very countries. Tariffs, like navies, thus provoke counterbuildlng, retaliation, aud all the things that go under the name of economic war.

The World Economic Conference of 1927 tried to pave rhe road back to economic sanity. Rut the “economic war” only gained more momentum, if tariffs were high in 1927. they arc mountainous to-day. even the last citadel, of free trade. Great Britain, having joined in Hie tariff race, with walls which, seem destined considerably to reduce the availability .of its great market to foreign producers.

The House Ways and Means Committee draws its own conclusions from lids rivalry. It ascribes to it. perhaps with some exaggeration, a fulling off of American trade last year of 2,800,000,0(10 dollars. It points out that as a consequence American plants are moving abroad instead of American goods, employing foreign instead of American labour. Within nine months in 1931 the number of exiled American factories in Canada alone had increased from 467 to 1071. Tlie committee rightly concludes that It would be in the interest of the United States as well as in that of the world to consider an international adjustment of tariffs.