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or more nations, supposedly as an inducement to international trade. Obviously, such a tariff reduction can be
reciprocal only if conditions in the
two participating countries are nearly
identical: that i.s to say, there must be
equality of living standards, wages,
taxes, commercial laws, and currency
stability. If these conditions do not
exist there simply cannot be reciprocal
trade.
Suppose that we agree to cut tariffs
in half. That would make the foreign
shirt sell for two dollars and fifty cents
in the United States and the American
shirts sell for three dollars in a foreign
country. The three-dollar American
shirts would be displaced over here,
but our own shirts still would not compete with the foreign shirt selling
abroad for only two dollars.
That is not all. Foreign countries
have all kinds of laws and regulations
that hinder American trade. Among
these is a restriction on currency convertibility. An American manufacturer
might be able to sell abroad for foreign currency, but he would not be
permitted to change it into dollars. He
would have to give his stuff away,
whereas we do allow dollars to be exchanged for foreign currency.
One gimmick is the cpiota system.
Another country might reduce tariffs
on American-made goods but place so
small a limit on the amount imported
that it would mean nothing to American industry.
A third device is to place discriminatory taxes on profits made by American firms in foreign commerce. These
are just a few examples of the methods
used by other countries to get around
reciprocal trade concessions. The reciprocal trade system includes the so-
called most-favored-nation clause
under which all nations get tariff concessions we make to any nation. We
might grant a tariff reduction on cloth
to Nicaragua, which produces very
little, but that would open the door to
such textile-manufacturing countries
as Great Britain. A reduction on
watch tariffs to India would open the
floodgates to Swiss watches ancl so on.
While we are on the subject of
watches, let's just remember the fact
that our own watch industry was recently going bankrupt because of low
tariffs and we were forced to increase
rates on Swiss watches to save a vital
industry. Loss of our watchmaking
plants would be disastrous because
these factories make precision instruments such as bombsights, in the case
of national emergency.
Page 38
As a result of the reciprocal trade
program, we have bankrupted or seriously injured a number of industries
v ital to the national defense including
. . . mining, the production of certain
vital metals, and others.
So the next time you hear that neat
little slogan, "Trade — Not Aid," you
might answer back, "Tariffs — Not
Relief." • •
CONGRESSMAN Lankford: Those of
us who recognize the essentiality
of expanded international trade to our
national security ancl economic well-
The tariff is the C.uU Stream of
politics. It flows through both par-
tics anil each is Irving to catch
llir olhcr in bathing anil steal his
clothes.
— Patrick Francis Murphy
Free trade is one of the greatest
Nosings which a government can
confer on a people.
— Mac u iky. Kssay:
tlilford's History of C.reece.
Our interest will he to throw
open the floors of commerce, ancl
to knock off all its shackles, giving perfect freedom to all pcr-oii*
for the vent of whatever they may
choose to bring into our ports, and
asking the .same in theirs.
— Thomas Jefferson, Writings.
being were heartened when President
Eisenhower said in 1954, "For our
own economic growth we must have
continually expanding world markets.
For our security we require that our
allies become economically strong. Expanding trade is the only adequate
solution. If we fail in our trade policy
we may fail in all."
However, since then we have been
disappointed ancl alarmed by the protectionist action on the part of the Administration which has made it harder
and harder for other countries to get
dollars with which to buy American
products. This choking-off of trade
with the U. S. is having grave cold
war consequences. For many of our
allies trade is not merely a matter of
convenience, it is a matter of survival.
Nearly all of them would prefer to
trade with the Western bloc, but if
they cannot do so they vvill be forced.
Out of sheer necessity, to trade with
the Soviet orbit.
Switzerland, for example, is a good
case in point. For 104 years America
Watel
taken
markc
attrac
with t
Soviel
•ogica
gic in
offens
eessfu
World
sisteni
not cc
with ,
and Switzerland have enjoyed
friendly economic relationship. EM
ing the past nine years Switzerlsj
has bought more than one billion, ft
hundred million dollars worth i
American products, while our pi
chases of Swiss products amounted
a billion dollars, thus giving our bt*
nessmen, farmers and workers a tra<
balance profit of five hundred milli"
dollars.
Among those who benefit from
Swiss trade are the tobacco farmers
southern Maryland, which I have
honor to represent in Congress,
fact, the Swiss are the largest ancl
very best cash customers for "
Maryland tobacco. Now where dot
Swiss get the dollars with which Velrm,
buy our Maryland tobacco and 1 tn1(, i
other sixty-eight million dollars won balan(
of American products they purcW g .
each year? A great deal of it coif j,^-'
from the sale of Swiss watches a1 \,.
watch movements in the UnM
States. That's why many people W^
concerned when the Administrat*
increased tariffs on Swiss watch <
ports by 50 per cent in July, 19"
They felt this was a backward step
the avowed foreign trade policy of]
Administration. These fears have b6
realized. In the last nine months
1955, Maryland tobacco exports w<
rorce
21 per cent below the exports of I
corresponding period of 1954. " son t
Maryland tobacco farmers thus hi \ye
tangible and real proof that inter)
tional trade is a two-way street.
no
'ifeeti-
r"») s
There are, of course, inany other' tyr „
rise effects of these high tariff actij '
it
name,
Suhco
, ' r
Mghlj
here, i
"This
have i
fellow
and tl
hands.
„ Earl
Hi,
su
force.
which have seriously endangered '
interchange of goods and good ^ p
between this country and Swit/erl'1" Suni
which are too obvious to recount
detail. The decision on Swiss WH
imports is a body-blow to our pies'1
and position of leadership in the »
world. To the free world, particull
Western Europe, this action beeaH1'
symbol of our foreign economic po"
against which our future policy S^
ments are to be weighed.
Another corollary effect of
action has come in the arena of
East-West struggle. The steppe''!"!
trade offensive by the Soviets with'
trade blandishments that are b*1
offered our allies has proved turn
ingly successful, for a consider'1
number of trade agreements "*
been signed between the East I
countries ol Western Europe. I
noteworthy that the Communist r
in Western Europe has aimed
propaganda machine at the SI
Facts Forum News, August,
1*
T
ing
tlie,
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