TRADE POLICY

Wairarapa Times-Age, 9 June 1938, Page 7

TRADE POLICY

AUSTRALIA & UNITED STATES INDICATED DIVERGENCE OF VIEWS. THE ANGLO-AMERICAN NEGOTIATIONS. By Telegraph.—Press Association, Copyright. WASHINGTON. June 7. “The wool tariff is the biggest imposition on the American public.” This, the Australian Associated Press learns, is the opinion privately entertained by the State Department but —and the but is extremely important —“until America obtains compensating concessions for its agricultural producers from some important industrial country (in this case Britain) the United States will be unable to make concessions to Australia on. wool.” This is possibly the central feature of the possibilities of an AustralianAmerican trade treaty from the American point of view. The Australian contention, on the other hand, seems to be that any Australian-American treaty must stand on its own feet. If the United States grants concessions on Australian wool, America will receive compensations, not by means of sacrifices or concessions from other parts of the British Empire, but by means of such rewards as lie within a wider market for American manufactured goods in Australia. Australian quarters point to the increasing gravity of the mounting unfavourable balance to Australia of Australian-American trade, and stress the probability that, unless the United States reduces her tariff on wool, she will meet an increasingly higher tariff wall against her goods sent to Australia. The State Department feels that, had Australia reacted quickly to the American intention last November to cancel the licensing arrangements, there would have followed an almost immediate removal of Australia from the U.S. black list, and discussions for a trade .treaty would have begun. Furthermore Congress, a't the turn of the year, showed a revival of its intermittent opposition to the reciprocal treaty idea, and the State Department felt it wisest to confine open trade treaty negotiations to Britain for the time being. The department also thinks that the present AngloAmerican negotiations must be satisfactorily completed before the Austra-lian-American negotiations can be begun.

The difficulties in the negotiations for an Anglo-American treaty are as follows:—

(1) Britain feels that the American dollar is over-valued, thereby giving American foreign trade too great an advantage. America, however, holds that currency: discussions can have no part in trade I 'treaty negotiations. The British counter this with the assertion that currency understandings can be reached in a parallel manner. Although the State Department brushes aside the idea that the United States is ready further to reduce the gold content of. the dollar to assure the continuance of its strong position in foreign trade, the Australian Associated Press correspondent understands that such an eventuality is not altogether impossible, particularly in the event of an intensification of the economic recession.

(2) Britain feels that America should not at this time attempt quantitatively to improve its export position, as world stability might then suffer. The State Department, can be said to be in general agreement with this principal. (3) Britain maintains that she cannot sacrifice the interest of the Dominions in a preferential market for their goods in Britain. The State Department, however, insists that Britain must make greater concessions to the United States, but, above all, must modify the concept of “perpetual” concessions to the Dominions. An opportunity for such modification is being offered in the proposed revision of the Ottawa agreements. It can safely be said, however, that the Ottawa agreements, no matter how they will be changed, will probably remain the central principle of Empire, trade policy both within and without the Empire. Summing up, the position is as follows:—The State Department will not say definitely just when it expects a break in the present deadlock in Anglo-American negotiations. It does believe, however, that the “log jam” is likely to break at any moment, and that quick agreement will be reached on outstanding points. Both British and American negotiators are convinced that, even if negotiations are protracted a good agreement will finally be reached —not merely a “face-saving" agreement, but one which will give both parties, if not all they are seeking, at least a substantial part of it. An Australian-American treaty would then be considered inevitable, but it is not considered likely to be negotiated this summer.