WORLD TRADE

Waikato Times, Volume 122, Issue 20409, 28 January 1938, Page 7

WORLD TRADE

ECONOMIC REPORT VAN ZEELAND’S MISSION THE HEART OF THE PROBLEM United Press Aasn.—Elec. Tel. Copyright (Received Jan. 28, 12.30 p.m.) LONDON, Jan. 27 Dr. van Zeeland’s report on his enquiry into th-e possibility of obtaining a general reduction of obstacles to international trade has been received by the British Government and is being released for publication. When Dr. van Zeeland visited Britain some months ago it was made clear that his discussions with the British Government were for the purpose of assisting him In the completion of the report and were not of a character to commit the United Kingdom Government to acceptance of any proposals which It might contain. POSITION OF STATES ISOLATION NOT POSSIBLE TRADE BARRIERS CONDEMNED United Press Assn.—Elec. Tel. Copyright (Received Jan. 28, 1 p.m.) LONDON, Jan. 27 Dr. van Zeeland in his report made after a comprehensive survey of the international economic malaise, says: "The heart of the problem, if the nations wish to diminish obstacles to international trade and restore to It a degree of flexibility allowing of its development, is tlie necessity of inducing many countries to mitigate, or abandon, measures of protective selfr sufficiency and return to a more complete system based on an international division of labour. It is impossible to divide the nations into distinct econ-

omic groups, some practising complete autarchy and other strict international free trade. Post-war Conditions “It must be recognised that economic relations are on a very different basis compared with those ruling before the war. “Formerly International exchanges were effected across frontiers, between Individuals, private firms and private interests. To-day International economic relations are taking on more and more the character of exchanges between economic units, constituted by the States themselves.” Referring to the efforts of some countries to replace raw materials with synthetic products because of their inability to pay for raw materials after the -shutting out of their manufactured goods by other countries, Dr. van Zeeland says: "The protectionist policy of countries that produce raw materials is re-acting against themselves. Moreover, it damages those they count as their traditional customers. Vicious circles are thus established. Economic Pact “The report visualises a pact of economic collaboration embracing the largest possible number of States, or, In any case, open to all. Its object would be to assist participants to raise the standard of living of their nationals. The proposed report would •contain two parts, tlie first- negative, by which the participants would agree to abstain from practices contrary to general interest. The second would he positive, by which participants would bind themselves lo examine, in a spirit of mutual assistance, the problems arising from their economic relations. Separate and more detailed arrangements could lie concluded under l-he ageis of the general pact. The First Step The first step is a conference, at least of France, Germany, Britain, United States and Italy, to discuss whether to accept the report as a basis for discussion on economic collaboration. If the answers are constructive the next stage will be the appointment of a bureau, which would invite all the States to explain iheir international commerce difficulties and what- assistance they expected from other States. The report suggests that the mandates should he made international. It considers that it would perhaps he opportune to adopt in respect of colonies the system at present obtaining in the Congo Basin. Where this possibility might be examined of creating privileged companies, whose capital would be divided internationally to offer real guarantees of impartiality. Difficulties Not IVlinimisecJ Dr. van Zeeland does not minimise the difficulties, and points out that some States do not see any solution to economic problems except the redistribution Of colonies: utiiers attribute their difficulties to exaggerated protectionism: and others still blame the unequal distribution of capital and (Continued tq next column/

lack of an adequate understanding of money and markets. Many circles blame, above all, the intensive rearmament. Dr. van Zeeland takes the view that the repeated shock to basic principles of international law are a pernicious influence on politico-economic relations, and adds: “It Is high time to restore the sanctity of plighted engagements and respect for International law. The report recommends the suppression of industrial quotas. The suppression of quotas does not imply a ban against dumping measures on the suppression of cartels. Dr. van Zeeland outlines the illcffe.’ts of currency instability, and considers it too early to return to the gold standard, but it would be possible to revise and extend a tripartie monetary agreement between Britain, France and the United States to include Belgium, Switzerland, the Netherlands and any other countries agreeable. The report emphasises urgency for suppressing restrictions on payments for merchandise, but recognises that it is necessary first to arrive at an agreed adjustment of external debts. Debtor countries must be supplied with credit facilities to enable them to support their export trade and finance a part of their imports. Dr. van Zeeland outlines machinery for doing this through bank international settlements. A Common Fund Dr. Van Zeeland specially commends a suggestion that the collaborating nations should establish a common fund, the resources of which might be applied to facilitate and finance legitimise trade. The fund would merely operate where normal methods are insufficient. The need for exceptional measures would very soon disappear if national economy recovered Its vigour and flexibility. Dr. Van Zeeland, commenting on the ‘-Ajis of abnormal tariffs, considers it necessary for the Governments fo undertake not to raise or widen the range of tariffs, but carry out a gradual reduction. Bilateral commercial agreements based on t lie most-favnured-nationnl clause remain one of the most efficacious methods of removing tariff barriers. It would be impossible to over-estimate the direct or indirect result of an Anglo-Ameri-can agreement.