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HIS DOCUMENT I S THE PROPERTY OF HIS BRITANNIC MAJESTY S QOVI3RNICTT.
1
. 1
COPY NO."
*
8
iO(S3) '
C A B I N E T .
DISCRIMINATION AGAINST UNITED KINGDOM EXPORTS.
Memorandum by t h e P r e s i d e n t
o f t h e Board o f
Trade.
I t has for a long period been a fundamental f e a t u r e
o u r e c o n o m i c p o l i c y t h a t we s h o u l d s e c u r e o u r s e l v e s
a n y a t t e m p t on t h e
part o f any f o r e i g n
country to
a g a i n s t U n i t e d Kingdom g o o d s i n t h e m a t t e r
There are,
in fact,
now i n f o r c e
against
differentiate
of customs
commercial t r e a t i e s
a r r a n g e m e n t s w i t h no l e s s t h a n 42 f o r e i g n c o u n t r i e s
duties.
or
other
which
p r o v i d e f o r t h e mutual accord o f m o s t - f a v o u r e d - n a t i o n
in t h i s respect.
of
treatment
In a d d i t i o n there are t r e a t i e s with
four
c o u n t r i e s ( A b y s s i n i a , L i b e r i a , Morocco and Muscat) w h i c h
us t h i s r i g h t u n i l a t e r a l l y
obligation
there b e i n g no
i n t h e s e c a s e s on o u r p a r t .
some o f t h e s e t r e a t i e s
most-favoured-nation
exception being
special
principle
corresponding
It is
true that
e x c e p t i o n s from t h e
are admitted,
the
to c o u n t r i e s
principal
These e x c e p t i o n s a r e , however, o f
p r a c t i c a l importance
until
and i t
historical
little
i s broadly speaking true
that
r e c e n t l y we c o u l d c l a i m t h a t U n i t e d Kingdom g o o d s
most-favoured-nation
y e a r s in
secured by
country w i t h which no such
engagement has been i n f o r c e
some f i f t y
enjoyed
treatment p r a c t i c a l l y throughout the
and t h a t t h i s t r e a t m e n t w a s i n m o s t c a s e s
The p r i n c i p a l
allowed
geographically
a s s o c i a t e d w i t h them o r c o n n e c t e d w i t h them b y l o n g
association.
in
general
that under which c e r t a i n c o u n t r i e s a r e
to give special preferences
give
fact enjoyed
treaty.
treaty
i s F r a n c e , b u t we h a v e
world
for
most-favoured-nation
t r e a t m e n t f o r our g o o d s i n F r a n c e by v i r t u e
and we h a d come t o b e l i e v e
standing to t h i s e f f e c t
of a t r e a t y .
that
t h e r e wa8 a t a c i t
w h i c h had a l l
I t was t h e r e f o r e
s u r t a x of
under­
the p r a c t i c a l
force
a r u d e s h o c k when t h e
French r e c e n t l y d e c i d e d to submit
to an a d d i t i o n a l
o f a French, l a w
the goods of
this
country
15 p e r c e n t a d v a l o r e m o n t h e
ground t h a t o u r d e p a r t u r e f r o m t h e g o l d s t a n d a r d g a v e u s
a d v a n t a g e w h i c h r e q u i r e d t o be c o u n t e r v a i l e d .
d i s c u s s i o n s have taken place
Considerable
i n r e g a r d to t h i s measure
d i s c r i m i n a t i o n on t h e p a r t o f
t h e F r e n c h Government
a t an e a r l y s t a g e a f a i r l y b r o a d h i n t was g i v e n t o
that persistence
in this
course could only lead
r e t a l i a t o r y measures on the p a r t o f
both by S i r Frederick L e i t h - F o s s
visits
to
These
recent
conversations
Attache.
g o o d r e a s o n t o h o p e t h a t t h e F r e n c h Government may
a t l a s t be y i e l d i n g t o our r e p r e s e n t a t i o n s ,
the o t h e r hand c o n s i d e r a b l e
seek to f o l l o w
It
informally
d u r i n g one of h i s
which h a v e t a k e n p l a c e w i t h the French Commercial
There i s
them
emphasised
t o P a r i s and a l s o by my D e p a r t m e n t i n
of
and
this country.
probable consequences have been f u r t h e r
an
is
the French
Impossible
maintaining
lead.
obstacles
no
on the same
We h a v e h e a r d much of
o b s t a c l e s which h i g h f o r e i g n customs
d e v e l o p m e n t of
the importance
t h a t U n i t e d Kingdom g o o d s
their foreign competitors
i n every f o r e i g n market.
tariffs
should
footing
the
they are a l t o g e t h e r
these
insignificant
compared w i t h t h e d i s a d v a n t a g e s we s h o u l d s u f f e r w e r e
goods of our c o m p e t i t o r s
customs r a t e s
are about t o I n s t i t u t e
Kingdom t h e r e
that foreign
t o e n j o y the advantage of
t h a n t h o s e imposed upon o u r s .
is,
a general tariff
the
lower
Now t h a t we
s y s t e m i n the
p e r h a p s , more l i k e l i h o o d
of
l i r p o s e on t h e
our e x p o r t t r a d e , but s e r i o u s a s
doubt a r e ,
on
t h a t o t h e r c o u n t r i e s may
to over-emphasise
the p o s i t i o n
meet t h o s e of
risk
but there i s
than i n the
c o u n t r i e s may c o n s i d e r t h e m s e l v e s
United
past
aggrieved
by s u o h m e a s u r e s a s we may d e o i d e
met w i t h a t h r e a t
treaties will
against
U3.
that
if
we p e r s i s t
It,
therefore,
weapon i n r e s e r v e .
l a u n c h i n g out
In t h e s e measures
a p p e a r s t o me t o be e s s e n t i a l
p o l i c y we s h o u l d h a v e a
o n our p a r t i n t o
them t o o u r d e t r i m e n t
of
is
t h a t we s h o u l d be a b l e
l e g i s l a t i o n w h i c h g i v e s u s means o f
any
to point
territories,
b u t by l i m i t i n g
considerable
there i s
a possibility
that
T h e r e a r e s i g n s of
the
the imports of
w i d e r a n g e of
that if
n o t by the
i m p o s i t i o n of
in this
development
She b e g a n by
In E s t o n i a , P e r s i a
some t i m e b e e n i n
It
i s obvious
fully
operation,
recently
possibilities
to this
that under such a system
of p a r t i c u l a r
goods i n c l u d e d i n
c o u n t r y may be a l t o g e t h e r
t h a t we a d o p t t o arm o u r s e l v e s
i n the m a t t e r of
there
of d i s c r i m i n a t i o n against
t o t h e t r a d e w h i c h we h a v e p r e v i o u s l y e n j o y e d .
therefore,
will
the p r o b a b l e a d o p t i o n i n S p a i n and Hungary of
the q u a n t i t i e s
quota a l l o t t e d
us
and
and i n P o l a n d a
S p a n i s h and Hungarian Governments have
are considerable
import
s y s t e m to a
s u r t a x i s d r o p p e d the q u o t a s y s t e m
systems.
event of
limiting
t h e 15 p e r c e n t
n o t i f i e d u s of
selvesj
duties,
M o r e o v e r i t h a s b e e n i n d i c a t e d to
the
similar
customs
imports
articles.
Turkey i m p o r t s a r e r e g u l a t e d by l i c e n c e ,
whilst
the
c o a l and f i a h and h a s now e x t e n d e d t h e
developed quota system has f o r
the
P r a n c e h a s a l r e a d y made
direction.
probably be c o n s i d e r a b l y e x t e n d e d .
in
dis­
us i n connection with
the q u a n t i t y i m p o r t e d .
strides
to
retaliation.
of a form of p r o t e c t i o n by w h i c h a c o u n t r y r e g u l a t e s
its
starting
of d i s c r i m i n a t i o n a g a i n s t u s
c r i m i n a t i o n may b e e x e r c i s e d a g a i n s t
working of a quota s y s t e m .
as
defensive
p r e v e n t i n g any o t h e r c o u n t r y
the matter of customs d u t i e s
that
t o , r i f f w a r s , b u t I am c o n v i n c e d
A p a r t f r o m the p o s s i b i l i t y
into
commercial
instituted
I am t h e l a s t p e r s o n t o a d v o c a t e
t h e s u r e s t method
specific
and t h a t we may be
b e d e n o u n c e d and d i s c r i m i n a t i o n b e
p a r t of our g e n e r a l f i s c a l
that
to adopt,
our­
the
out of
proportion
Any m e a s u r e ,
against
discrimination
c u s t o m s d u t i e s must g i v e ua p o w e r s a l s o
d i s c r i m i n a t i o n b e i n g e x e r c i s e d i n the m a t t e r
restrictions.
of
in
the
xn t h e l i g h t
Bill
of
these
considerations
I have had a
d r a f t e d w h i c h g i v e s p o w e r t o t h e B o a r d o f Trade
t a x e s p e c i a l a c t i o n a g a i n s t g o o d s o f any f o r e i g n
which e x e r c i s e s
way o f t h e
of
a Bill
d i s c r i m i n a t i o n a g a i n s t our goods whether by
importation or
on t h e s e
view to i t s
or
otherwise,
l i n e s was o r i g i n a l l y p r e p a r e d w i t h a
i n t r o d u c t i o n as a separate measure, but I
now p r o p o s e t o my c o l l e a g u e s
form b u t t h a t
its
tariff
i s now u n d e r
that
it
should not take
measure the immediate
the
i n t r o d u c t i o n of
which
consideration.
the B i l l
is to permit,
in the
such d i s c r i m i n a t i o n a s i s above r e f e r r e d to b e i n g
a g a i n s t our g o o d s , o f
cent,
special
duties
The B i l l
possibility
as drafted,
o f an a l t e r n a t i v e
exercised
offending
however, provides for
form of r e t a l i a t o r y
d u t y on
special
r e s t r i c t i o n t o the q u a n t i t y t h a t might be imported.
forced to r e t a l i a t e
consideration,
advantage i f
we w e r e
reduce the r e v e n u e
This
of
being
a g a i n s t F r e n c h g o o d s was u n d e r
still
able
that
i t would b e
an
t o c o l l e c t a c e r t a i n amount o f
on such a commodity a s w i n e ,
p r o c e e d by the i m p o s i t i o n
In t h i s
when t h e p o s s i b i l i t y
and i t was t h o u g h t
the duty l e v i a b l e
I
certain
c a s e s i t might b e p r e f e r a b l e n o t t o impose a s p e c i a l
the f o r e i g n goods concerned, but to apply a
the
action.
understand t h a t the Treasury took the view that i n
v i e w was thrown o u t o r i g i n a l l y
event
( n o t e x c e e d i n g 100 p e r
ad v a l o r e m ) b e i n g i m p o s e d on g o o d s o f t h e
country.
would
that
c o n t e n t s s h o u l d be i n c o r p o r a t e d i n
The m a i n p u r p o r t o f
of
country
i m p o s i t i o n of d u t i e s or by the p r o h i b i t i o n
restriction
general
to
of e x c e s s i v e
to i n s i g n i f i c a n t
c o n n e c t i o n , however,
r a t h e r than to
d u t i e s which
might
proportions.
I would o b s e r v e
that,
whilst
-
customs d u t i e s are s p e c i f i c a l l y
e x c l u d e d from t h e s c o p e
the Anglo-French Convention of 1882,
the Convention
of
precludes
u s from d i s o r i m i n a t i n g
restriction
i n the matter of p r o h i b i t i o n
against Frenoh goods,
s o t h a t b e f o r e we
h a v e t o d e n o u n c e t h e C o n v e n t i o n w h i c h w o u l d i n any
r e q u i r e three months' n o t i c e .
n e g o t i a t i o n s w i t h France
duties
whilst
If,
therefore,
Bhould f a i l
the
to result
i t w o u l d be p o s s i b l e
case
in
t o impose
an
special
on F r e n c h g o o d s a t o n c e u n d e r t h e l e g i s l a t i o n
suggested,
or
could
q u o t a s y s t e m t o F r e n o h g o o d s a l o n e we 3hould
apply a s p e c i a l
agreement,
or
quotaB
i t w o u l d n o t be p o s s i b l e
until
the Convention no l o n g e r
Apart from t h i s
tbat
a quota system i s
desirable
t o introduce
of r e t a l i a t i n g
country.
It
is
altogether
one w h i c h i t w o u l d b e
Into this
against
prohibitions
yperated.
c o n s i d e r a t i o n I am n o t
satisfied
purpose
t o impose
now
country even f o r the
an u n f r i e n d l y
special
I
foreign
one w h i c h i n v o l v e s t h e s e t t i n g up o f
c o m p l i c a t e d m a c h i n e r y and a t b e s t
s e e m s t o me t o be a c r u d e
I
m
device
t h a t w o u l d work u n f a i r l y
in this
country.
On t h e w h o l e ,
a s b e t w e e n t r a d e r and t r a d e r
therefore,
o b s e r v a t i o n s w h i c h t h e C h a n c e l l o r of
to offer
p o w e r s t o be c o n f e r r e d
to the Issue
Trade,
27th January,
1932.
any
t h e E x c h e q u e r may h a v e
s h o u l d be d r o p p e d and t h a t
quota
the
on t h e B o a r d o f Trade s h o u l d be
of Orders imposing customs
W.R.
Board of
to
I s h o u l d be d i s p o s e d t o recommend t h a t t h e
and l i c e n s i n g p r o v i s i o n s
confined
subject
J
duties.
I