Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, NOV. 21, 1938. A GREAT ACHIEVEMENT

Poverty Bay Herald, Volume LXV, Issue 19792, 21 November 1938, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, NOV. 21, 1938. A GREAT ACHIEVEMENT

The conclusion of a trade agreement between Great Britain and the United States, and to a lesser extent the arrangement of a new pact between Canada and the United Stales,

is an achievement the importance of which can hardly be exaggerated. Negotiations towards this end have been in continuous progress for the past year and the preliminary discussions have extended over a much longer period. Without vv.y detailed knowledge of the proceedings it must be evident that every step was fraught with great difficulty, and it is certain that the many problems could not have been overcome without the utmost goodwill on both sides. On various occasions in recent months it had been rumoured that the negotiations had broken clown, and such a result, in all the circumstances, would not have caused a great deal of surprise. It is to be suspected, however, that recent developments in Europe increased the determination to

succeed and there is one statesman, in particular, who must be chagrined at the thought thai he has done more than any other individual to cement the bonds which unite the two great English-speaking democracies. This new alliance may be destined to play a far more important part in preserving the peace of the world than all the military treaties that could be

devised, and it is from this aspect that the agreement derives such historic significance. Experience will probably show that the real value of the agreement is more political than economic. It is not easy at first glance to appreciate the advantages and disadvantages 1o the trade of the two countries concerned, but it is obvious that the concessions cannot really be farreaching. For the two greatest manu- : facturing countries in the world to open their doors to the products of one another would inevitably result in a widespread dislocation in the industries of both; consequently each has been constrained to seek for concessions in limited spheres. That they have succeeded beyond expectations is made clear from the variety of goods affected and by the total value of trade involved. More important than the actual gains, however, is the conclusive evidence of a sincere desire to reduce the barriers which have had such a crippling effect on the trade of the world. This agreement, more than any which have preceded it, marks a definite reversal of the post-war trend towards economic self-sufficiency. The two greatest trading nations of the world, instead of gradually closing their doors to the 1 commerce of each other, have pushed them a little further ajar, and it is not too much to expect that the movement, once started, will continue and will lead to similar action on the part of others.

To some extent, at least, a snowball development is assured, because, in both cases. most-favoured nation clauses apply. This means that the concessions given by the signatories to each Other are automatically accorded to other countries with whom agreements already exist. In other words, a larger share of the world's two largest markets has become available to a substantiad number of trading nations, and the next step will be for the latter to display' a reasonable measure of reciprocity. In their own interests, they will virtually be compelled to do so in order to protect the advantages they at present enjoy. In this way a number of nations will become bound together by ties of friendship and commerce, and because their mutual interests will demand the maintenance of peace there will be a better prospect of peace being preserved. The economic ills which have been such a prolific cause of international unrest will not be cured by this one step, but they will at least be ameliorated, and the

agreement may serve to prove to others that grievances can be redressed without resort to war and in a far more effective and lasting manner. This agreement, however, should be regarded as only the first step, and by no means the last. It has the great merit that it is directed against none but leaves room for participation by all; it is by the extent to which others ultimately participate that its real success will be measured. There will be an inevitable tendency on the part of other countries to endeavour to assess the effect of the new treaty upon their own particular interests. This is only natural, but it would be a grave mistake to attempt to value the agreement on this basis. On the face of it. New Zealand, and more particularly Australia, have been penalised by the concessions given by Great Britain to the United States. America, as a great agricultural country, will come into keener competition with the Dominions, but a logical sequel to the agreement will be the further opening of the American market to produce from the Dominions. Apart from this possibility, the Dominions should benefit from the stimulus which will be given to British industry and the consequent increase in the capacity of British workers to purchase produce from overseas. Thus it is that in order correctly to appraise the results of the agreement it is necessary to look beyond isolated details, which may at first loom unduly large, and to regard it from the more general point of view of a step towards the reopening of the world markets from which the primary exporting countries probably have most to gain. In the meantime, the one thing that seems most definite is that a halt has been called to the policy of imposing restrictions against trade, and this fact, insofar as New Zealand is concerned, must be accepted, not only as a blessing but also as a warn-