Rockefeller Blueprint

A blueprint for boosting world trade and developing backward countries was laid down this week in Foreign Economic Policy for the Twentieth Century, third in a series of special reports by the Rockefeller Brothers Fund (TIME, Jan. 13). Said the report: "There exists no vocal constituency for foreign economic policy. As a result, foreign economic policy has all too often become simply a response to a series of separate crises. Nothing is more important, therefore, than to bring about the conviction that a sustained and imaginative policy is crucial not only for our self-interest but for the peace and well-being of the entire world."

One of the foundations for a foreign economic policy is a reciprocal trade broadening of pacts. The report goes much further than the reciprocal trade bill passed last week by the House, wants the program to be made a permanent part of national policy, with broader presidential powers and a reconsideration of such hobbling provisions as escape clauses and peril points. To answer protectionists, the report points out that 4,500,000 U.S. workers depend directly on foreign trade, contribute to a trade surplus of $6 billion a year. While "it is unavoidable that some of our imports will compete with segments of domestic production . . . American industry is well able to meet such competition." Trade liberalization "will increase the competitive discipline that is a major safeguard against inflation."

For countries that depend heavily on one commodity for income, the report has some concrete suggestions to ease the blow when commodity prices fall. It suggests 1) a system of international credits to keep up the purchasing power of a hard-hit nation until prices recover, and 2) a "ceiling" and "floor" 10% above and below the average price of a commodity in a previous year, to mitigate wild fluctuations of commodity prices.

Again and again the report stresses the importance of private capital investment, which is twice the volume of U.S. aid. "The driving force in a free country comes from the initiative, imagination and willingness to assume responsibility on the part of innumerable individuals." To date, underdeveloped countries have neglected private capital. To encourage it, they must stabilize their currencies, check inflation, provide tax incentives to ensure that profits can be commensurate with risks. The U.S. could also provide tax incentives for the U.S. investors, extending the 14% reduction in corporate taxes enjoyed by companies investing in the Western Hemisphere.

Many of the tools, such as loan funds and technical assistance, needed to expand trade, says the report, already exist in United Nations agencies or bilateral agreements. But, the panel notes, they must be more fully implemented. The U.S. must provide more personnel to foreign nations, step up the spread of U.S. know-how, thus show the world an enthusiastic response to the economic challenge.

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