New tremors in the world economy threaten to put a stop to the painstaking efforts by which American trade policy is being, with much uncertainty, adapted to modern times. The danger should be fought off-but that will require still more adaptation.
After a period of unprecedented continuity, from 1934 to the mid-1960s, American foreign trade policy entered a time of great uncertainty. The implications for the world economy were serious, since American policy had been the lever by which a high degree of trade liberalization had been achieved. The strong unilateral action taken by the United States in the summer of 1971-ending the convertibility of the dollar into gold and imposing a surcharge on imports-dramatically suggested how disruptive an American turn to clear-cut economic nationalism might be. In retrospect, it can also be seen as a watershed beyond which American policy made a new start toward the further liberalization of world trade. Ambiguities, uncertainties and obstacles remained, other countries were slow to respond, but a process was under way. Now, suddenly, the entire effort is imperilled by new, dramatic events that seem likely to bring out the worst in everyone.
The questions are not just those of Watergate, foreign oil, Russian wheat, the wounds of Vietnam, traumatic reactions in Japan, and the year of Europe that was, though all these are part of the picture. To understand the present position, we need to look not only at recent events but at some fundamental changes in the political dimensions of American foreign trade policy. International relations, domestic politics, and changes in the nature of international trade policy itself are all involved. A few new developments are clear-cut and have predictable consequences for trade policy. For the most part analysis runs up against developments that are more sensed than demonstrated, and must deal with vivid events that may not have anything like the same significance in the long run that people now ascribe to them. The best that one can do at this
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