Courtesy Reuters

New Horizons in Foreign Trade

Unless there is new legislation, the President will, at midnight on June 30, 1967, lose his power to cut American tariffs in trade bargains with other countries. The situation is familiar enough. Eleven times already the country has faced the question of renewing the grant of power first made in the Trade Agreements Act of 1934. Each time, Congress has prolonged the power, sometimes enlarging and sometimes reducing it. Mixing long-run policy and short-run tactics to get the best possible terms for the renewal of trade legislation is an old art in Washington. But this renewal is different.

It is different because if the Kennedy Round-the tariff negotiations that have been going on in Geneva for the last few years-comes out as it seems likely to, we shall be on the threshold of a period in which trade negotiations among industrialized countries will take on new forms and a greatly enlarged scope. Sooner or later, though not necessarily in 1967, the President will have to be given new kinds of powers to engage in trade negotiations: an extension of the existing ones to cut tariffs will no longer suffice. (And if the Kennedy Round does not live up to reasonable expectations, the issues involved in a 1967 renewal will look different again, but for other reasons.)

Though trade negotiations may not be quite as unpredictable as dice or cards, it is surprising how much agreement there is among those who have looked into the matter as to what may come out of the Kennedy Round. The main impact will be on trade in manufactured goods among the advanced industrial areas-North America, Western Europe and Japan. Some important products will not be touched, but for many others duties will be cut in half (the largest possible reduction under American law, with a few exceptions). For still other goods there will be some kind of in-between cut, especially if one country has very high tariffs and another very low ones. Averaging tariffs is a questionable practice, but some

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