The Dominion. THURSDAY, JANUARY 27, 1938. ANGLO-AMERICAN TRADE AGREEMENT

Dominion, Volume 31, Issue 104, 27 January 1938, Page 8

The Dominion. THURSDAY, JANUARY 27, 1938. ANGLO-AMERICAN TRADE AGREEMENT

4 The proposed Anglo-American Trade Agreement has given rise to a good deal of conjecture since the first hint of negotiations was given simultaneously in London and Washington last November. Opinion on both sides of the Atlantic is divided on the significance of the pact. The question is being freely discussed whether it is primarily political or whether it may be accepted at the face value of any ordinary commercial agreement as between nations. Ihe answer appears to be that it embraces both aspects. Exploratory discussions were initiated early last year on a purely economic basis; in later months the course of world events clothed the negotiations with an overshadowing importance unforeseen in the earlier stages. The President of the Board of Trade, according to a report yesterday, admitted the political value of the pact. At the same time he emphasised his belief that it would lead to a greater flow of trade between Britain and the U.S.A., and provide an example in the lowering of trade barriers throughout the world. It has been stated that the negotiations were initiated from the American side. At first sight this needs explanation. By the latest trade returns the United States sells to Britain nearly three times the value of goods she imports from Britain. Plainly, the United States cannot expect to increase her balance still further at the expense of British manufacturers. There is a suggestion that bargaining will be undertaken largely on the basis of raw materials and foods in exchange for. tariff concessions for British goods. Concurrently or subsequently Washington hopes to extend the agreement to others, bringing in Canada, Australia, New Zealand and South Africa. Ihe Washington Post describes the negotiations as “a reply both to the alliance recently concluded between Germany, Italy-arid Japan, and to the Brazilian move to form a Fascist State.” Again, the Washington correspondent of The Times says that nothing Jess is involved than the test of the adequacy of democratic institutions for the purpose of co-operation and as a method of meeting an ever-growing, danger. Here the political significance is stressed, strengthening criticism, in Britain that she has little to gain economically and possibly something to lose by trade concessions to the United States. From this reasoning the benefit to Britain may be mainly in a closer alliance politically, and it is not a small gain. What of the Dominions ? The Prime Minister of Australia, for one, does not fear the consequences of an Anglo-American commercial treaty. Mr. Lyons contends that such an agreement does not involve the surrender of the principle of Imperial preference. Nevertheless, it is difficult to see how the virtual admission of the United States into the charmed circle of Empire trade —for this is what any substantial concessions may mean —can avoid some diversion of trade as between Britain and the Dominions. The difficulties are abundant, but not insuperable if goodwill and a desire for closer economic and political accord outweigh more immediate considerations.