Postponed: "Freer Trade"

"God caused nature to distribute her benefits, or His blessings, to severall climates supplying the barenesse of some things in our country, with the fruitful-nesse and store of other countries, to the end that enterchangeably one common-weale should live with another."

So wrote, more than 300 years ago, a Lancashire merchant named Gerard Ma-lynes, faithful servant to Elizabeth of England and one of Britain's earliest economic writers. Two centuries after Ma-lynes this became the bright gospel of "Free Trade," which seemed to promise to all men the freedom of the ocean, the tolerance of the high road and the fraternity of the market place. Of late decades, the promise has dimmed. Last week ended, somewhat dismally, a revival meeting of the once stirring gospel.

Babel to Eden. In quiet Havana, distant from the main stream of events, 53 nations last week signed and tossed into history's lap a weighty compact. Typically, the nations' delegates were apt to speak not of "free trade," but of "freer trade." In the smudged lexicon of economic diplomacy, "freer" meant less free, not more free. The term indicated that the best anyone could hope for was a slow, gradual removal of the tangled barriers, prohibitions and nationalist restrictions. At Geneva last year 18 nations had managed to write a draft charter for the proposed International Trade Organization, a project which, in the somewhat startling words of Sir Stafford Cripps, "had never before been attempted except at the tower of Babel." At Havana, where the nations convened last November to mold the Geneva draft into final shape, Babel's spirit still prevailed.

The U.S. pressed for lowering of tariffs, abolition of quantitative restrictions (i.e., fixing of how much of certain goods a nation could buy or sell), the breakup of tight little barter and preference blocs. .But the "backward" nations of Asia, Africa and Latin America insisted that, unless their fledgling industries were protected by fences, they would forever remain merely cheap sources of bananas, coffee or jute for the more highly industrialized nations. The delegates of these "backward" nations pointed out that it was only the protective tariff which had made 19th Century America so rich that it could afford to oppose protection. Argentina's Diego Luis Molinari (who refused to sign the charter) denounced I.T.O. as a U.S. plot, and as "an international spiderweb of Shylocks squeezing the heart of hungry multitudes."

In the bronze and marble conference halls of Cuba's Capitolio Nacional the delegates paid lip service to the ideals of the Geneva draft; but the real news was made in the cafes and lobbies where, over their frozen daiquiris, the delegates were busy planning more restrictions. The Moslem countries prepared a Middle East Bloc, to be developed by a series of government five-and twelve-year plans; the Argentines wanted a similar preference bloc in South America; the Soviet satellites (three of whom had sent representatives to Havana even though Russia had not) talked of further tightening their "anti-Marshall" economic bloc. Though the British went along with the U.S. on many points, the British sterling bloc would for the time being remain intact.

Like children overhearing their elders, many delegates got unexpected ideas. Said one observer from Asia: "Many of us did not know what an economic bloc really was. . . . After listening to the arguments against Britain's preference system, we came to desire such a system ourselves." Said an American delegate: "It's been a lot like Adam in the Garden of Eden."

The Hen's Teeth. Several times the conference was on the verge of a breakdown, was kept going by U.S. concessions on preference systems and quotas. The talks dragged on so long that U.N. funds ran low and a third of the employees of the U.N. Conference for Trade & Employment found themselves unemployed. After delegates had suggested more than 600 amendments to the Geneva draft, a Belgian delegate made a modest proposal. Instead of affirming the principle of free trade and listing the endless exceptions, why not simply outlaw free trade and list the few instances in which it might be practiced?

When, after four months, the delegates finally signed the charter last week, it looked as though the Belgian had made a sensible suggestion. The charter's 106 intricate articles contained more loopholes than rules.

The charter prohibited quantitative restrictions in principle, but it permitted them temporarily to countries short of foreign exchange or recovering from war, or suffering from various kinds of "special" emergencies. The charter disapproved of additions to existing preference agreements, but devised no effective way of prohibiting them. It disapproved of barter agreements, unless approved by I.T.O., and even without such approval where I.T.O. machinery caused "unreasonable delay." It prohibited discriminatory internal taxes on imported goods, but it permitted exceptions (e.g., films). It prohibited government subsidies for exports, but (on the U.S.'s own request) made special exceptions for certain goods (e.g., cotton).

It solemnly recognized that unemployment, standards of living and labor inside one nation were of concern to all, but it assured all nations that there would be no interference in their affairs. The organization, to function under U.N.'s ECOSOC, would come into being after 20 of the signatory members ratified the charter; it would be a moral umpire with no enforcement powers.

During the conference, one U.S. newsman had written: "There is a danger that I.T.O. will be as toothless as a hen and reduced to clucking admonitively. . . ."

Why? What had wrecked the great hopes for a healthy, worldwide free market which Americans (and not only Americans) had held at war's end?

The answer was not mere orneriness, stupidity or greed. It lay not merely in the notions of economic nationalism which the Nazis had spread, nor merely in the notions of state-run business which socialism was propagating. The strongest force working against freer trade was one that had inspired, not long ago, almost Utopian optimism about the future. It was 20th Century technology.

Rosie & Self-Sufficiency. Modern semiskilled mass production looked like an easy trick to learn. After seeing millions of high school girls, with little more industrial training than an Indian villager or a Mexican peasant, turning out a staggering mass of planes, tanks and guns, no Indian and no Argentine would ever again believe that it could be done only in the industrialized countries. Anyone (with the right management) could do what Rosie the Riveter had done. That was one reason why nations believed they could dig in behind barriers and become more nearly "self-sufficient."

Added to that was another 20th Century phenomenon, the threat of total war. No nation wanted to be more dependent than it could help on any other nation-- too dangerous.

So "freer trade" will be delayed awhile. Havana made a little surface progress, but the undercurrent toward restriction is stronger than the belief that "one com-monweale should live with another."

This file is automatically generated by a robot program, so reader's discretion is required.