The New Trade Policy of the United States

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IT MAY be assumed that the recovery of world commerce is conditioned to a large degree on the recovery of our commerce, and that our commerce is, in turn, dependent to an important degree upon a revival of general world business. The Administration's foreign trade recovery program has, therefore, awakened world-wide interest. There is hope and some apprehension in this country, and hope, and perhaps skepticism, abroad. How valid are these various feelings of hope, skepticism and apprehension?

The best way to judge the possibilities of the American trade agreements program is to state briefly its aims and purposes. The Act of June 12, 1934, entitled "An Act to Amend the Tariff Act of 1930," gives the President the power to modify customs duties and other import restrictions in exchange for similar concessions from other countries which will result in "expanding foreign markets for the products of the United States." No existing duty, however, may be changed by more than 50 percent, and no article may be transferred from the free list to the dutiable list or from the dutiable list to the free list. The Act authorizes the Administration to reduce trade barriers set up by the United States in exchange for the reduction of such barriers in other countries, with the objective of increasing the commerce of the United States and, pari passu, that of the countries with which trade agreements are made. Moreover, being based on the unconditional most-favored-nation principle, each bilateral agreement stimulates international trade in the aggregate.

The whole program, and more particularly the methods employed, have come in for a good deal of criticism, not only on the part of those who are opposed to any actions which would affect our present tariffs and of those who are committed to the philosophy of autarchy, but also on the part of those who genuinely believe in broad international trade and who feel that its reëstablishment is vital to any important degree of world recovery. Some of these more sympathetic critics have doubts as to the efficacy of the trade agreements program as now being conducted and feel that some other method would be better. I shall discuss frankly the arguments advanced by such critics, rather than those of the opponents of any liberalization of our commercial policy...