FOREIGN ElCONOMIC AND COMMERCIAL POLICY


795


than in the maintenance of protection to individual domestic indus-
tries through high tariffs or preferences.
  3. The proposal for unilateral tariff action by the United States,
in seeking a solution of the balance-of-payments problem, would place
the main emphasis on restriction rather than expansion and on adjust-
ments by the United States alone rather than on adjustments by all
countries concerned. The solution of the problem along expansionist
lines argues for the development of greater ability of the United
Kingdom and other Western European countries to compete in dollar
markets and third markets and less reliance on the protection of home
industries or on export markets protected by preferences and dis-
crimination. The proposal for unilateral tariff reduction by the United
,States implies a great deal in the way of adjustment by the United
States while making no provision for adjustment by the United
Kingdom or other Western European countries.
  4. Unilateral tariff reduction by the United States would be less
effective in attracting United Kingdom exports to the dollar area than
would joint action involving both United States tariffs and Common-
wealth preferences. This is so because continuation of the Common-
wealth preferences exerts a pull on British exports to Commonwealth
markets and away from American markets. Simultaneous action on
both the United States tariff and the Commonwealth preferences
would do the maximum in stimulating exports to the United States
and thus permit a balance of trade at a higher level than would other-
wise be possible.
  5. Unilateral tariff reduction would be a political impossibility for
the United States. The trade agreements program is solidly based on
the concept of reciprocity. We have been able to maintain this concept,
despite the existence of severe quota and exchange restrictions against
our exports, only on the ground that through foreign tariff reduction
and preference elimination we were buying long-run benefits which
in time would make themselves felt. Failure to obtain these benefits
in future negotiations would leave us without any defense what-
soever and would not provide us with any greater commitments than
we already have for the removal of foreign quotas and exchange con-
trols. The serious criticisms which have been voiced in the United
States with respect to the balance of payments exception in the GATT
would be redoubled, and justifiably so.
  6. In view of the foregoing, it would be impossible for the United
States to take substantial action with respect to its tariff at Torquay
except in return for substantial action by other countries on their
tariffs and preferences.