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The Most-Favored-Nation Policy in Relation to Trade Agreements

Published online by Cambridge University Press:  02 September 2013

Francis B. Sayre
Francis B. Sayre
Affiliation:
Department of State, Washington, D. C.
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Extract

The virulent disease which has been attacking and crippling international trade, particularly since 1929, has manifested itself in two different forms. The one is mounting trade barriers, which tend to fence off nation from nation and thus effectively to check the flow of world trade. The other is the practice of discrimination, which nations are using in increasing degree to force markets out of the hands of their competitors or to gain political advantage of one kind or another. If economic stability is to be won and the peace of the world to be made secure, it is just as necessary to overcome the one as the other.

The Trade Agreements Act was passed by Congress for the purpose “of expanding foreign markets for the products of the United States.” It is clear that the accomplishment of this purpose necessitates a program with a two-fold objective. The program must seek, first, the reduction or elimination of excessive trade barriers; and second, the elimination of trade discriminations.

Type
Research Article
Information
American Political Science Review , Volume 33 , Issue 3 , June 1939 , pp. 411 - 423
Copyright
Copyright © American Political Science Association 1939

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References

1 In our shipping policy, we have from time to time resorted freely to discriminatory practices.

2 See infra, p. 419.

3 A possible third course is the “conditional” most-favored-nation policy. But, as pointed out below, as a tariff policy this is, under present-day conditions, so impractical from an administrative viewpoint and so unwise from an economic view-point that, as stated above, it was definitely abandoned by Mr. Hughes when secretary of state and is no longer seriously advocated by responsible statesmen. See infra, pp. 419.

4 According to an estimate made when fourteen of our trade agreements were in force, the pursuit of this policy affected approximately $30,000,000 worth of our imports; in return, it safeguarded and benefited at least $265,000,000 worth of American exports.

5 In the following discussion, whenever the most-favored-nation policy is referred to, the meaning is the policy in its unconditional form.

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