The Wealth of a Nation by C. Donald Johnson

Author:C. Donald Johnson [Johnson, C. Donald]
Language: eng
Format: epub
Published: 2018-10-15T00:00:00+00:00

ARTICLE VII NEGOTIATIONS

Over the years following the 1942 signing of the Anglo-American Mutual Aid Agreement implementing the Lend-Lease program, experts from both sides of the Atlantic had conducted periodic consultations at the senior staff level on the form and substance of postwar international economic relations pursuant to the controversial Article VII of the Agreement and the principles of the Atlantic Charter. Harry Hawkins, first as head of the Division of Commercial Policy and Trade Agreements and since 1944 minister-counselor for economic affairs at the American Embassy in London, led the State Department’s team. Hugh Dalton, a Labor MP and president of the Board of Trade, along with Lionel Charles Robbins and James Edward Meade from the Economic Section of the War Cabinet Secretariat, principally represented the British. All were prominent academic economists—Hawkins had formerly taught at the University of Virginia, Dalton and Robbins22 at the London School of Economics and Political Science (LSE), and Meade at Oxford and Cambridge—and all shared very similar views on the need for an international trade organization to govern commercial relations among nations after the war.

Meade, who in 1977 would receive the Nobel Prize in economics for work on international economic policy at LSE and Cambridge, produced a draft “Proposal for an International Commercial Union” in July 1942. This proposal, which was designed to work in parallel with Keynes’s proposal for an International Clearing Union for monetary affairs, offered membership to any nation accepting the principles of nondiscrimination (with certain exceptions, including “a moderate degree of Imperial Preference”) and the reduction of trade barriers favoring domestic over foreign products.23 Based upon the Meade proposal, the Board of Trade produced a report that circulated through the staff levels of the appropriate British ministries and gained tentative approval for discussion purposes with the Americans in the autumn of 1943. In September and October, a UK delegation gathered in Washington for an informal exchange of ideas with their counterparts at the State and Treasury Departments. Representing the British Treasury, John Maynard Keynes met with Harry Dexter White at the US Treasury to discuss the monetary issues that would lead to the Bretton Woods Conference in 1944, while Robbins, Meade, and others from the Board of Trade met with Harry Hawkins and his staff at State on trade policy. The result of the consultations at State was a finding of significant compatibility on most issues, including the desire to form an international institution to facilitate the reduction of trade barriers, to limit the use of import quotas, and to focus on the means to ensure full employment when the war ended.

The two issues on which serious disagreement existed were the method to be used in conducting tariff negotiations and the issue of ending trade discrimination raised in Article VII. The British pushed for across-the-board tariff cuts negotiated at a multilateral conference with all parties participating in the negotiations. Although Hawkins was sympathetic to this approach—and Hull preferred it philosophically—FDR and the politically cautious Hull insisted on the bilateral, product-by-product approach that had been employed in the RTAA agreements.

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