Action on Watches

Under an escape clause in the 1951 Reciprocal Trade Agreements Extension Act, U.S. industries that feel themselves injured or threatened by increased foreign imports may appeal for relief through higher tariffs. With a single exception (alsike-clover seed from Canada), President Eisenhower has consistently rejected such appeals in favor of the nation's overriding interest in freer trade.

Last week the President made another exception, granted tariff increases up to 50% on Swiss watches. The new rates apply to nonjeweled watches and watches containing not more than 17 jewels, and increase the duty from 9¢ to $1.15 per movement.* Supporting his decision, the President noted that imports of Swiss movements, up 4,000,000 units last year over the 1946-50 annual average of 8,300,000, are doing "serious injury" to American makers, whose production costs are nearly twice as high, and who are being outsold in the U.S. nearly 4 to 1. The President cited an interdepartmental Government committee report that stressed the necessity for maintaining a nucleus of at least 4,000 skilled U.S. watchmakers available to produce civilian and military timing devices in event of war. With American production dropping, workers were turning away from the industry at a rate that the committee found alarming.

The President insisted the decision did not mean he had abandoned his goal of lower international tariff barriers. But his action, coming after this year's abandonment by the White House of the freer-trade program in the Randall Commission report, was sure to be taken as a further signal that the U.S. Government has no serious intention of pushing for freer trade.

The national defense argument used in the Swiss watch case is a timely reminder that present-day support for trade restrictions often has a much broader basis for argument than oldfashioned, McKinley-style business protectionism. Trade barriers sometimes arise out of Socialist concern for national planning and sometimes, as in this case, out of military considerations.

U.S. policymakers have not yet found their way around in the newer considerations affecting trade policy. The result tends to be a lot of free-trade preachment and a considerable amount of restriction in practice. Another and more serious result is that the U.S., confused as to its own world-trade goals, is not able to present to other nations proposals for a clear and consistent international-trade policy.

* Principally affected: watches retailing for $35 to $71.50, whose prices are expected to rise from 50¢ to $5.

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