Toward World Trade

After three months of rehearsal, the U.S. loan to Britain appeared on the world stage last week. The scattering of angry critics both on Capitol Hill and in Parliament was not likely to hold up its projected run to the year 2000, for the two greatest traders in the world needed each other. The terms meant that they would work in closer economic partnership than ever before.

The war had made Britain a debtor nation; she needed dollars to get back on her feet. To her the $4,400,000,000 loan meant:

P: No continuing headache on Lend-Lease to vex future relations. The U.S. canceled almost $25 billion, advanced some $650,000,000 for tidying up the rest.

P: $3,750,000,000 line of credit to be drawn any time in the next six years. Britain is permitted to use the dollars anywhere, may well spend less than half of them in the U.S. But the dollars will eventually be spent in the U.S. by the countries which get them from Britain.

P:No let-up in British austerity. Almost every dollar will go for food (to maintain minimum rations) or raw materials (to get factories going). Last week clothes-short Britons heard that all their silks and high-grade woolens would be reserved for export.

P: A speeding-up of reconversion, which will also allow Government controls to be cut as production increases. Britain needs this not only to restore her own war-battered land but to regain her overseas markets. To get even moderate prosperity, she must lift her exports 75% above 1938. On V-J day they stood at only 30% of 1938.

The Anglo-American negotiators agreed to do as much as they could to break down bilateralism and expand world markets. The proposals for an International Trade Organization (ITO) which the State Department's shrewd Will Clayton drafted months ago got full British support "on all important points." This global trade charter, sent last week to other nations for study, outlined plans to revise or abolish such trade restrictions as import quotas, export subsidies, tariff preferences, cartels and dumping schemes.

To implement the proposals, the U.S. will call a meeting next spring of some 15 "nuclear nations" who do the great bulk of the world's trade. Purpose of the meeting: to cut tariffs as much as possible, lay the foundations for a conference to establish ITO next summer.

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