EUROPE'S FUTURE

Evening Post, Volume CVIII, Issue 149, 20 December 1929, Page 12

EUROPE'S FUTURE

A UNITED STATES?

GREAT BRITAIN'S POSITION

AND EMPIRE TRADE

"One of the oustanding features of lie post-war position has been the evelopment in the export world of :ie United States of America, and liere is to-day much discussion in lurope as to the reasons for her bounding prosperity," stated Mr. L. F. aish, 0.8. E., His Majesty's Trade Comlissioner, in his address at the New Icaland Club luncheon yesterday. Many people think (added Mr. Paish) hat it is clue to the fact that _ the Tnitcd States'of America, as its name nplies, is a union of States with a urrounding tariff wall and absolute ree trade between the States. This nion has the effect of providing a irge protected home market, which nables American manufacturers to put own mass-production plant on a scale ,-hich is not possible to manufacturers ifferently situated. To take a single xample, over 80 per cent, of the motor ars in use in the world are in the Tnited States of America, and this normous market is practically reserved y the tariff to the American car-manu-acturer. It is, therefore, not surprisug that the production of motor-cars 11 the United States of America is on very different scale from that possible n other parts of the world. CONDITIONS IN EUROPE. "Look at the conditions prevailing in Jurope. If one journeys from Paris 0 Stockholm, one passes through six [ifferent countries, with five different inguages, different systems of coinage, nd different customs, and through sis .ifferent customs-barriers, which are aised and lowered at the behest of ix different sets of electors. And his within a distance which can be ilaeed inside one of the larger States ■f America. Is it airy wonder that tatesmen in Europe are considering v-hetner it is not possible to form a Jnitcd States of Europe, so that the advantages which the American inanuacturers enjoy because of their large onsuining home population may be in joyed by the producers in Europe? VI. Briand, the late French Premier, ather astonished Europe by suggestng something of the kind at Geneva ast September. It is difficult to unlerstand precisely what was. in his nind; but, apparently, the idea is to form in Europe a union of nations vhich should impose a lower internal ariff for trade between themselves and 1 higher external tariff for trade witli )ther nations. In other words, they ihould adopt a system similar to the lystem of Imperial preference which is idopted in many parts of the British Empire. COMBINE OR COMPETE? "Now, Europe comprises a collection )f many different races, widely differjnt in character and customs; and any mion such as that proposed seems exircmely unlikely to materialise. But there is no doubt that industrialists in Europe, particularly in the basic trades ike iron and steel, are ■ drawing closer together. There is a gradually-grow-ing realisation that it is better to sombine than to compete, and industrialists in Great Britain will probably liav.fi to decide at no distant date whether they are going to be within the European economic union or outside it. EMPIRE TREE TRADE. "And that brings us to Empire Free Trade. I suppose you have ■ all read the manifesto which Lord Beaverbrook lias distributed throughout the Empire. Lord Beaverbrook is the proprietor of the "Daily Express," which is probably the most full-blooded protectionist daily in the United Kingdom, and he has come out as the leading advocate of what is known as "Empire Free Trade." It is urged that Great Britain, rather than enter a European economic union, should unite economically with the other nations which- form tlie British Commonwealth of Nations, so as to constitute a large economic unit better able 'to compete with the United States of America, and with any European union which may be formed. The British Empire comprises one quarter of the area of the world, and one quarter of the world's population, and there seems little doubt that, if it were possible to weld that Empire into a single economic unit, it would form the greatest economic foi'ee in the world. WHAT IS MEANT?" "But what is meant by the proposal which is being put forward under the specious term "Empire Free Trade." No one, I presume, imagines that at this stage of their development, the Dominions are going to throw open their secondary industries to unrestricted competition from factories in the Old Country. I imagine that what is intended is simply that various parts of the Empire should give a tariff preference to Empire goods. But that position exists to-day in many .parts of the Empire; and if all that is intended is an extension of the Imperial preference idea, I cannot help feeling that it is rather regrettable that it should be put forward as something entirely new. I take it, however, that really the new idea is .that Great Britain should; in return for an increase in the system of Imperial preference, place a general tariff on foreign goods, including foodstuffs. If this is really what is intended, it should be freely and franklystated. The subject is far too important to bo dealt with in vague phrases which hide real meanings. THE POSITION AT HOME. "What arc the possibilities of Empire Free Trade, as thus explained, coming to the realm of practical politics. We have in Great Britain three political parties. The Labour Party, which is at present in office, is free trade 'by conviction. The Liberal Party is also free trade by conviction; and the Conservative Party, which ;s the only party with protectionist leanings, apparently has to disclaim any general protectionist policy if it wishes to hold office. WHY BRITAIN HAS FREE TRADE. "It is sometimes difficult for other parts of the Empire to understand why it is that Great Britain, of all nations in the world, so consistently adheres to her free trade policy. But, in order to live, Great Britain must import a great quantity of foodstuffs, and in order to pay for those -foodstuffs she must export large quantities of munufacturcd goods. These goods, too, must bo sold in great quantities to foreignl countries, where price is one of the'main considerations. The imposition of a tariff on foreign food would probably cause a rise in the cost of living, and a consequential rise in the price of our manufactured products. Such a rise could only react adversely on our export trade to foreign countries; and at the moment it does not seem likely that the trade lost with foreign countries could be regained in Empire markets. These are the considerations which has kept Great Britain for a century a free trade country. •THE PROTECTIONIST VIEW. "The ardent protectionist argues that Die imposition of a tariff on foreign food stuffs would not raise the cost of living, because of the Empire supplies avail- j

able. But I imagine that most people will agree that a shortage of supplies will cause prices to rise; and that a shortage of foodstuffs would only too probably follow from the taxation >o£ food is indicated by tho facts that at the moment we only got 30 per cent, of our imported beef from the Empire, only 20 per cent, of our pork and bacon, 50 per cent, of our butter, and 60 per cent, of our imported mutton and lamb. In these circumstances, is it not likely that the imposition of a tariff on foreign foodstuffs would raise the cost of living, with consequent serious damage to our export trade?

"Nevertheless, the idea seems to be obtaining increasing support. Men of the standing of Mr. Arnery, Lord Melchett, and Sir Harry MacGowan—all convinced Imperialists—appear to think that some practical proposal may be hammered out of this idea; and, of course, every one of us is only too glad to see these things talked about because they bring into the limelight the absolute need of bringing the various parts of the Empire closer and closer together. THE LATEST RECRUIT. "The latest recruit to the cause is, I see, your retiring High Commissioner, Sir James Parr, and 1 am sure that he, with his forceful personality, will prove a tower of strength in the campaign."