The Pamphlet Collection of Sir Robert Stout: Volume 51
Chapter V. — Reciprocity
It has been proposed to enlarge our foreign trade by the following curious process. We are to prevail upon foreign countries to take more of our goods by threatening that, if they do not, we shall take less of theirs. We are to induce our neighbours to extend their foreign trade by proposing, as the alternative, that we shall diminish our own. This is called the reciprocity, but it ought to be called the retaliatory, system. If the foreign country with which we are negotiating yield to our pressure, we increase our foreign trade; if not, we diminish it. In the first case we increase our exports and consequently our imports too. In the second case we diminish our imports and consequently our exports too. It is to be left to the caprice, ignorance, or ill-will of a foreign nation to decide whether England is to lose a portion of her foreign trade or not. For it cannot be too often repeated that if we carry out our threat of importing less, it necessitates our exporting less to the same page 20 extent. It is proposed that we should enter into a formal international engagement to lop off a portion of our foreign trade, and in various other ways to do ourselves a serious injury, unless other people agree to alter their fiscal policy. Supposing that other countries decline acceding to our minatory invitation that they should reduce their tariffs, and that we accordingly impose such an import duty on articles that they have been in the habit of sending us, as shall reduce our annual importations thereof by £10,000,000, what then? No doubt they will not like it, but how shall we? A reduction of imports of £10,000,000 means a corresponding reduction of exports to the same amount, and is equivalent to a diminution of our foreign trade to the extent of £20,000,000 per annum, to say nothing of the disastrous effects to every consumer in the country, of the rise that would ensue in the price of the articles which we ceased to import, and the numerous other evils which the change would entail. Are we prepared to enter into a compact that we will submit ourselves to all these calamities in the event of other countries declining to be coerced by us into free trade? It is surely better to leave things as they are than to resort to measures that shall subject us to such an alternative.
Fortunately, reciprocity possesses one great advantage—viz., it is impracticable. Among the articles which we receive from abroad there is hardly one that reciprocity can lay hold of. Ninety-one per cent, of what we import consists of food and raw materials, to tax which is out of the question, and the nine per cent, of manufactured goods—which is all that the entire world supplies to us—affords far too feeble a leverage to work with.* This part of the subject has, page 21 however, been made so clear in various recent publications that we need not dwell on it.
There is the greater incongruity about the reciprocity system, from its being advocated by many who, in other respects, profess free-trade principles. For there is a manifest inconsistency in asking our foreign friends to admit our goods and so far adopt our policy of free trade, under the alternative that, otherwise, we shall shut out theirs and so far adopt their policy of protection. Since free trade teaches us that it is unwise in foreign nations to exclude our commodities from their ports, how can it be wise in us to carry out our threat and exclude their commodities from our ports? It is tantamount to proclaiming to the foreigner, "Unless you will become free traders we will become protectionists." We might just as fitly proclaim to the Turks, "Unless you become converted to the blessed truths of Christianity we will ourselves turn Mahometans," If free trade be a truth and a reliable principle it must remain an immutable standard of right to those who understand and believe in it; and is not to be alternately professed and ignored in order to drive a bargain or gain an advantage. Those who entertain a firm conviction that free commercial intercourse is for the benefit of all men in all countries, will never consent to enter into conditional arrangements under which there may be a possibility of their having to act in opposition to that conviction. To adopt the reciprocity system would be the first step towards re-enacting the Corn Laws.
* By taking in the multifarious and insignificant odds and ends lumped together in the Board of Trade returns as "Unenumerated Articles," and by classing as manufactures such things as pictures, works of art, books, medical drugs, toys, confectionery, &c. &c., the percentage of foreign manufactures imported has been distended by Reciprocitarians to 13½ per cent. Even if we admit this incorrect classification, the argument remains untouched, for foreign nations would hardly be coerced by our threat of taxing such trifles as their sulphate of quinine, or their violin strings, or their macaroons, &c. &c.