American trade specialists have drawn up a code of inrnational trading principles published as the Proposals Expansion of World Trade and Employment. These roposals show specifically how nations can cooperate to <pand trade.

Great Britain and France, as well as other nations, have greed generally to support the principles set forth in the merican Proposals and to cooperate in the writing of a orld trade charter. They have also agreed to negotiate ductions of trade barriers.

This charter provides the machinery that would carry it the international trade objectives of the Atlantic harter, the lend-lease agreements, the Bretton Woods reements, and the United Nations Charter. The American Proposals suggest that the world trade arter provide for international agreement—

1. to reduce trade restrictions and discriminations imsed by governments;

2. to eliminate restrictions on trade imposed by private siness groups;

3. to prevent, by intergovernmental action, disorder in e markets for certain primary commodities;

4. to seek full employment by cooperative rather than nflicting nationalistic measures which in the past have led to accomplish their employment objectives and have rther restricted international commerce;

5. to establish an international organization-the Innational Trade Organization (ITO)—to administer the ›rld trade charter and to provide an effective forum for :ure negotiation of problems of international commerce.

International Agreement To Reduce Trade Barriers and To Formulate International Trading Principles

"What is needed is a broad and yet detailed agreement, among many nations, dealing at one time with many different sorts of governmental restrictions upon trade, reducing all of them at once on a balanced and equitable basis, and stating rules and principles within which the restrictions permitted to remain should be administered." -Proposals for Expansion of World Trade and Employment

riffs

'No government", the Proposals point out, "is ready embrace 'free trade' in any absolute sense. Neverthe, much can usefully be done by international agreeent toward reduction of governmental barriers to trade." ariffs have been traditionally the greatest barrier to in

ternational trade, and tariff barriers have been greatly increased during the past 25 years. The United States raised its tariffs three times during one decade-1921, 1922, and 1930. Britain, traditionally a free-trade country, set up a large-scale tariff system in 1932 and gave extensive preferences or reductions to Empire countries. Thirtyfive countries raised their tariffs in 1932.

The American Proposals recommend that all countries negotiate to their mutual advantage for substantial reductions of import and export tariffs and other barriers. Tariff Preferences

Preferences have been used by a number of countries for many years. Under the preference system the nations included place higher tariff rates on products of countries outside the system than on products of countries in the system. The United States has preference-tariff agree. ments with Cuba and the Philippines. Much more important is the "Empire Preference System" established by the British Commonwealth countries under the Ottawa agreements of 1932. Germany and many other countries also used the preference system.

The American Proposals look toward the elimination of tariff preferences. No new preferences would be introduced. Existing preferences will be reduced in the course of tariff bargaining.

Quotas and Embargoes

Quotas have been used by many countries to set rigid limits on imports or exports. They are used primarily to promote self-sufficiency, to protect domestic industries, and to conserve foreign exchange. The war has greatly expanded this system.

Some countries have imposed complete embargoes on the export or import of certain commodities.

The American Proposals recommend that countries agree to use import quotas only under certain exceptional circumstances. Among the most important of these exceptions are:

1. to conserve limited foreign exchange resources, because a country's whole international economic position would otherwise be damaged;

2 to limit imports of "primary" farm products, especially in connection with domestic programs for restricting production;

3.) to avoid difficulties in the immediate post-war period likely to be caused by limited supplies of goods and shipping.

When import quotas are used, they should be applied fairly to the trade of all countries.

DEP SIT D BY THE

UNITED STATES OF AMERICA

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Export quotas and embargoes are also ruled out unless they are needed for exceptional purposes, such as conservation of limited supplies or in order to control and guarantee the high quality of exported goods.

Subsidies

Many countries have used export subsidies to push their products into foreign trade. Such subsidies are usually considered a form of unfair competition. Taxpayers in the exporting countries bear the cost.

The American Proposals recommend that members of the ITO agree not to subsidize exports, unless a commodity piles up in burdensome world surplus and an intergovernmental agreement is not reached for controlling its production and distribution. In general, nations using subsidies of any kind, including subsidies of domestic production, should keep the ITO informed as to the extent and nature of the subsidies, as well as the reasons for them, and the probable effects on trade. If the subsidies appear to injure international trade, the nation should agree to discuss possible limitations.

State Trading

Many countries conduct at least part of their foreign trade through state trading agencies or monopolies. The Soviet Government, for example, handles all Russian trade. Recently the British Government decided to continue its wartime practice of purchasing all raw cotton through a state agency.

The American Proposals recommend general principles for the conduct of state trading. They do not presume to tell countries how to organize their trade; on the contrary, they are designed to accommodate various economic systems. It is proposed that member nations engaged in state trading in any form should make foreign purchases solely on commercial considerations, such as price, quality, marketability, transportation, and terms of purchase or sale. Government monopolies of particular commodities should not be used to protect domestic producers unduly. In particular the difference between the price at which the monopoly buys the foreign goods and the price it charges for them in the domestic market should be subject to negotiation just like tariffs.

States with a complete monopoly of all foreign trade, it is proposed, should agree to purchase annually an agreed amount of foreign goods.

Exchange Controls

Exchange controls have made international trade difficult and uncertain. By requiring government permits to exchange currencies, governments can direct and limit

trade according to their own plans. During the war, for example, the British controlled strictly the exchange of British pounds for American dollars and other currencies in order to make certain that the scarce foreign exchang was to buy those articles and materials most needed fo carrying on the war. Exchange controls represent one o the main impediments to present international commerce The American Proposals recommend that exchange con trols be dropped within a reasonable period and that the be employed later only if conforming to the Internationa Monetary Fund Agreement. The Fund is set up to facil itate exchange of various currencies and to prevent fluctua tions in currencies. Any members of the Internationa Trade Organization using restrictions on exchange-fo good reasons-would undertake to give fair treatment t the trade of all other members.

Other General Suggestions

It is recommended that:

internal taxes on imports be the same as on domesti goods;

members levy no duties on goods in transit through the territories coming from and going to other members; members work out internationally acceptable valuatio systems for levying import duties;

excessive requirements for marks of origin be elim nated;

members refrain from governmentally supported bo cotts to discourage imports;

adequate publicity regarding laws and regulations affed ing foreign trade be provided, and tribunals be establishe to review and correct administrative customs procedure and

members provide the ITO with appropriate trade info mation and statistics.

• International Action To Eliminate Restri tions on Trade by Private Business Grou

"Clearly, if trade is to increase as a result of the lightening of government restrictions, the governments concerned must make sure that it is not restrained by private combinations."

-Proposals for Expansion of World Trade and Employment

International Cartels and Restrictive Busine Practices

Cartels are means by which markets are allocated tween various concerns, competition is eliminated, pri are kept high, production is restricted, inventions a