Abolishing the Trade Slave

Since the depression, Western nations have accepted the necessity of freer trade. The need for economic strength in the Cold War has only confirmed this belief, yet under the sway of particular interests, the United States has failed to lower its tariffs on many products manufactured by her allies. Consequently, despite forty billion dollars spent in aid, these countries can neither develop industrially nor purchase needed American products. The result is often a lower standard of living and resentment of "Yankee imperialism." Besides weakening Western defense in general, high tariffs have hurt American exporters in particular, since some foreign markets have closed, either in retaliation or of necessity. Paul Hoffman has estimated that this amounts to a five billion dollar cut-back in American exports annually.

To counter the situation, thirty-four nations signed a General Agreement on Tariffs and Trade in 1947 to provide a meeting-ground for the settlement of trade disputes. Although GATT has been a step toward cooperation, its forums meet only once a year and many settlements in the past have been only ineffective bi-lateral agreements. Because no international agency supervises administration of the compacts, disputes often arise. The plan for an Organization for Trade Cooperation, currently before Congress, offers some support for GATT's rather shaky foundations. OTC would serve as a "continuous mechanism" for discussion of disputes and administration of GATT trade rules.

Many Congressmen fear the bill is a threat to particular interests, like the wheat farmers. Still other oppose OTC on the ground that its adoption would surrender too much power to an international agency. The organization, however, would not have supranational powers; it would serve merely as a coordinator of international bargaining for those who chose to use it. Its rules are flexible enough to allow the United States an exemption on the importation of grain. Although OTC would be a permanent organ, it commits the United States to little more than the original General Agreement.

In some respects, the OTC proposal does not go far enough. To be really effective, it would need powers of enforcement, but Congressional sentiment currently opposes such controls. As it stands, the organization could at least help gain the removal of "discriminatory restrictions" against 'United States' exports. By promoting the conversion of currency, OTC could encourage investments in underdeveloped and war-torn countries.

Because of its limited duties, OTC is no panacea for trade problems, but it should be approved, if only to secure the faith of our thirty-three allies. If Congress does not pass the plan, ensuing distrust might lead to new and higher tariff barriers and ultimately halt the expansion of world trade. By enacting OTC and its sister proposal, the Reciprocal Trade Act, Congress could relieve the hardening of Western arteries of trade.