The Pamphlet Collection of Sir Robert Stout: Volume 52
"Fair Trade:" Its Impossibility
"Fair Trade:" Its Impossibility.
"Fair Trade," as defined by Fair Traders, means that England should place a heavy tax on foreign goods sent into the country, in order to retaliate on the foreigner, and to force him to adopt "Free Trade," or at least largely to diminish the duties which he now levies on British goods.
It would not be difficult to show that this plan would disastrously affect our trade and commerce, and injure us very much more than it would injure the foreigner. But it will be sufficient, if it can be shown that it is not in our power effectually to retaliate on foreign countries, and force them, against their will, to receive our goods duty free.
Protective duties abroad are chiefly aimed at English goods, and while some persons here cry out because of the import into England of a small amount of foreign manufactured goods, foreign manufacturers complain still more bitterly of the competition from which they suffer, even in their own protected markets, from British manufactures.
Unless, therefore, it could be clearly shown that the foreigner would have more to gain than to lose from accepting our terms, it is evident that he would persist in his present course of action; and, not only so, but to parry our attack, he would still further raise his protective duties, and thus still further exclude our goods from his markets. Let us look, then, into the question of the possibility of forcing foreign nations to accept our terms.
The goods which we received last year (1884) from abroad were valued at £390,000,000, the goods we sent abroad at £295,000,000. As, then, our imports so largely exceed our exports, it seems easy, by imposing a duty on the imports, to compel the foreigner to take his duty off our exports.
But before we can talk of compulsion, we must examine the question a page break How much of this could the foreigner attack?
We will deduct the Articles of Food and the Miscellaneous as not liable to attack—total, £37,400,000—though, even now, some of the protective countries impose import duties on corn.
A large portion of the Raw Materials—consisting as they do of coal, copper, cotton, hemp, silk, wool, tallow, wood, &c.—is open to attack, and would certainly be attacked by the foreigner determined to maintain his protective duties at any cost; while the taxes already levied in protective countries on our Manufactures and Semi-manufactures would be immediately increased. That, by so doing, those countries would seriously injure their own prosperity can be no consolation to us who depend to so great an extent on foreign custom.
We may safely assert, therefore, that our exports are vulnerable to the extent of £240,000,000, while, as already shown, the vulnerability of the foreign imports is measured by £30,000,000—the power of foreign retaliation being thus eight times as great as our power of attack.
Of course we do not send all our exports to protective countries, nor do we receive all our imports from them; much comes and goes between us and the neutral, non-protective, markets of the world. But, practically, the more protective the country, the less are our powers of attack; from the most protective countries we receive the smallest amount of manufactured goods—for the very good reason, that, in consequence of their Protective duties, they cannot produce so cheaply as we can, and cannot therefore compete with us.
But without going into details as to our trade with the various countries, it is clear that however much we might desire to injure the foreigner, in order to induce him to remove his protective tariff, our powers are so very limited as to make any attempt of the sort useless.
No doubt, if we chose, we could exclude foreign manufactures from our markets; but we must not forget that the results springing from any system of Protection—as this would be—could not be confined to the thirty millions of foreign imports, but would injuriously affect our whole foreign trade of six to seven hundred millions.
Free Trade enables us to produce goods more cheaply than any other nation in the world. Any tampering with its principle would necessarily increase the cost of production all round; and would thus not only seriously diminish our powers of competing with other nations in their own protected markets, but would imperil our supremacy in the neutral markets of the world, on which our commercial future so largely depends.
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