=464. Demand for customs duties as a means of defense and
retaliation.=—One group of “tariff reformers” clung to the ideal of
free trade, and favored its maintenance as the policy of the country
in general. It would, however, permit deviations from it in particular
cases. The adherents of this view asserted that England stripped
herself of the armor and the weapons of commercial war when she
adopted complete free trade. She could make no effective protest when
other nations raised tariffs against her, marked perhaps by offensive
discriminations; she must suffer everything because she was forbidden
to retaliate. The adherents of this view laid particular stress on the
practice of “dumping,” as it is called. The manufacturers of protected
nations, themselves, secure from England’s competition, market their
surplus output in England at prices which may not cover the costs, much
less the profits, of production. It is cheaper to do this than to break
prices in the protected market at home; it kills the English industries
and enables foreign manufacturers in the long run to raise prices to
a profitable level in the English market. For retaliation against
protective countries, and for defense against “dumping,” this school
demanded that the English government be armed with the power to impose
heavy duties, to be temporary in character and to be removed as soon as
their immediate object has been accomplished. Such a policy has been
adopted in Canada.
=465. Proposal of an imperial customs union.=—Another school of tariff
reformers, led by Joseph Chamberlain, accepted in general the views
just indicated, but laid particular stress on another possibility in
shaping English commercial policy. It would make the whole great group
of English dependencies not only a political unit but a commercial unit
as well, bound together in an imperial customs union (_Zollverein_), so
that trade would flow from place to place within the Empire instead of
crossing its frontier. It is not possible here to discuss the various
aspects of this proposal, of which some of the most important are
political rather than commercial in character. The attractiveness of
the plan is at once apparent; it promises to assure to England a market
for her manufactures in the colonies, and to the colonies a protected
market for their raw materials in England. The practical weakness of
the plan is, however, equally apparent; no law would be necessary
to secure this result if the various parts of the Empire found it
advantageous to trade with each other, and the mere suggestion that a
law is necessary shows that trade would be cramped and the interests of
individuals hurt by such an arrangement.
Public-domain text, read in full here on John Shaqi.
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