THE H.B. TRIBUNE WEDNESDAY, APRIL 4, 1934 CHANGING TARIFF POLICIES

Hawke's Bay Tribune, Volume XXIV, Issue 94, 4 April 1934, Page 6

THE H.B. TRIBUNE WEDNESDAY, APRIL 4, 1934 CHANGING TARIFF POLICIES

What is described as the most drastic tariff-making change in American history has taken place by the handing over of power to the President for a period of three years to raise or lower and tariffs by 50 per cent, through reciprocal trade agreements with other countries. The method adopted is an emergency one, the object of which is to meet the rapid changes of the world situation in trade as they arise. Tt is recognised that the world has organised itself into a series of watertight compartments and that something drastic must be done to lubricate the exchange machinery in regard to goods and services. Both the President and the Secretary for Agriculture, Mr. Henry A. Wallace, have made it their business to make it. clear to the American people that goods can be sold abroad only in proportion to the amount of purchases that one made in return. An examination of the British system was carried out in America, and the net conclusion after several months of deliberation amounted in a reiteration of the recognised fact that Britain can sell only because she buys. The President’s request for power to make reciprocal agreements followed as a natural course. The feature to be noticed is the influence of British policy. When we turn to France, we find that a similar movement is afoot, inspired by the American example. At the beginning of March last, the Senate and the Chamber of Deputies passed the budget bill and. granted full powers to President Doumergue to modify the French tariff policy without consulting Parliament. This power is granted until 1935, and the expressed purpose of the move is “to facilitate trade negotiations now in progress or in preparation.” Here again it is seen that reciprocity is the ruling word as determining the policy to be adopted. Any kind of exclusiveness is discredited as tending to check the free flow of trade.

A glance at Germany shows a similar movement, particularly in her relations with Poland. The end of the tariff war between those two countries is now in sight, with the consequent prospect of easing the trade relations. The signing of the non-aggression pact at the beginning of the year has had its inevitable result in the economic sphere. This is exemplified in the agreement which came into existence two months ago -whereby the PolishGerman tariff war will end by Poland’s removal of import prohibitions, of the maximum customs duties which, since 1925. have been imposed on German goods, and of the various restrictions that were formerly placed upon German shipping. Germany, on her part, will grant transit

permits for Polish animals and meat products through Germany to Western Europe, and certain importations of coal will be allowed. In addition, private agreements have been arrived at in regard to the iron and shippingindustries of both countries. Frontier traffic and air traffic have also come under a milder system of administration.

The arrival of the Soviet ship in America, reference to which was made in yesterday’s news columns, may also be taken as a further illustration of the general movement for freer trade: but enough has been said to indicate the nature of the general movement which is taking place all over the world in the direction of a wider willingness to give and take. It has for long been an axiom of world economies that no nation can live unto itself, but for the first time in a generation this principle has been recognised in a practical way. There can be no doubt that the present experiments, given good management, will succeed. As a result, there will be the creation of happier conditions for all concerned in the agreements.