August 23,1952
From the
London
Britain's
End
Trade
T
HE request of the British Empire
Chambers of Commerce (With
its headquarters in L o n d o n ) that
Japan be not admitted into G A T T
has brought matters to a head in
which the British Government is by
no means a disinterested spectator.
W i t h the increasing difficulties which
Britain's export industries are facing, the question of German and
Japanese competition in traditionally British markets has led to a spate
of debate and demands in the local
press.
In many cases, the discussion has not been w i t h o u t some criticism of American policy which, as
is now clear, is designed to foster
the economies of both Japan and
Western Germany w i t h o u t sharing
the burden of rearmament, for the
defence of Britain and Western
Europe.
T h e steps taken by the
British Government have, however,
been somewhat half-hearted, possibly to avoid any direct conflict
w i t h the Americans on w h o m they
appear to be so heavily dependent.
To help to meet the " balance of
payments crisis ", a number of Colonial Governments, it has been recently announced, have taken measures to restrict or entirely suspend
the import of Japanese textiles. At
the same time, the Cotton Board
has appointed a special committee
to study the opportunities for L a n cashire textile exports in Colonial
markets. These decisions, it is reported, " w i l l give a considerable
fillip to textile exports ". T h e total
imports of textiles into the Colonics
in 1951 was 865 m i l l i o n square yds.,
of which the United K i n g d o m supplied 224 m i l l i o n , I n d i a 390 m i l l i o n and Japan 157 million. W i t h
the temporary exclusion of Japan,
Britain and India w i l l now be the
main competitors.
Even if I n d i a
exports as much as she can, there
w i l l be more opportunities for British
exporters.
It is not, however, only in the
field of textiles that British exporters
are feeling the ' pinch ' of foreign
competition. I n chemicals and i n
manufactured goods the comeback
of Germany into the international
trade arena has placed B r i t a i n at
a decided disadvantage.
Recently
the Financial Times
complained
that prices quoted by West Germ a n ''producers are causing concern
Competitors
because in some instances they give
the impression of undercutting
without strict reference to costs".
These ' unhappy practices' to secure
orders which were a problem before the war, may once again become a feature of trade and it
appears that some discussion has
taken place on methods to combat
competition w h i c h , if it develops,
might completely restrict British
exports. Another practice of these
competitors w h i c h is proving to be
a headache to Britain is that relati n g to credit facilities. T h e effect is
seen chiefly in capital goods where
German exporters, among others,
have in some cases been offering
facilities for repayment over periods
varying from 5 to 10 years as against
the two-year m a x i m u m w h i c h is
the normal British practice.
The
inability of British producers to
contend w i t h competition of this
type is due in part to the lack of
resources for financing long-term
export transactions at the disposal
of exporting firms and partly clue to
the limitations officially imposed on
export credit facilities.
As the
spread of the buyers' market leads
to intensified competition, this may
become a matter of considerable
importance.
A l l these factors have gone a long
way in m a k i n g both Germany and
Japan major trading nations. The
Economic Survey of Europe for
1951 reported that German exports
to Europe increased by 35 per cent
and to countries outside Europe by
154 per cent in one year.
The
U n i t e d K i n g d o m exports to Europe
in 1951 on the other hand, fell by
2 per cent and her exports to countries outside Europe increased by
only 8 per cent. Japan also made
remarkable progress in exports.
These figures are danger signals.
The return of Germany and Japan
as first-class trading nations poses
important questions for B r i t a i n .
The dependence, of the country on
865
exports for its livelihood is dangerously at stake and in consequence
B r i t a i n has t w o alternatives to consider immediately. Either she takes
immediate measures to scale down
her dependence on foreign trade or
pursues a policy of wholesale discrimination and imperial preference
against German and Japanese goods.
On the first alternative, the influential Sunday Observer has already
started a series of editorial articles
setting forth the need for a fundamental change in the British economy. Under the title ' Re-thinking O u r F u t u r e ' the Observer lists
what are the main features of B r i tain's economic position. These are
in the main, the well-known, regular deterioration of the terms of
trade and the country's extreme
vulnerability to both booms and
slumps in w o r l d trade. It calls for
a switching over of capital and
labour from obsolescent export i n dustries, no matter how revolutionary it might appear. " O u r first
aim must be to reduce our i m p o r t
dependence, and our second a i m to
concentrate our remaining exports
on goods w h i c h the w o r l d still needs
from u s " .
It suggests that the
country should broadly a i m " at
trading as little as we must, rather
than as much as we can ".
The other alternative, however,
appears to be the more attractive.
Already efforts at discrimination
arc being contemplated, and in
many cases, are in practice. Business circles are most vocal on the
question of the correctness of this
course and hardly a week passes
w i t h o u t some industrial or commercial organisation making representations to the Board of Trade
for a more determined policy.
So
as to avoid a possible return to naked
economic war-fare, it appears that
the British Government is presently
engaged in some artful persuasion
w i t h the Americans and the Japanese that the war devastated economies of Germany and Japan
should be rebuilt in such a way as
not to present difficulties to the
" course and expansion of international t r a d e " . This type of opportunism, however, is easy to see
through.
On the whole it is easier to j o g
along in the rut, hope for the best,
rely on m u d d l i n g through and as
the
Observer
remarks,
" blame
somebody or something eke for every
recurrent crisis ". T h e present Government's lack of a definite policy
shows this easy way p u t