The Best of Stimulants

Three of the U.S.'s good friends and hard-bargaining customers agreed last week to take more U.S. goods. They did so with appropriately pretty speeches. "Equity if not gratitude" requires it, said France's Finance Minister Antoine Pinay. Britain's Chancellor of the Exchequer Derick Heathcoat Amory launched into a tribute "to the invaluable help that we and all other countries in the free world have received from the U.S. in economic aid during the difficult postwar period."

They then let down quota barriers against U.S. goods, responding to Under Secretary of State Douglas Dillon's warning (TIME, Nov. 9) that they would face a "resurgence of protectionism and restrictive action" if they did not. Britain, France and Japan agreed that the time has come for thriving nations to scrap discriminatory trade restrictions against the U.S. born of postwar dollar shortages. In many cases the changes were more psychological than real, for tariffs or market conditions will continue to exclude what quotas do not. Still, the U.S. was only hoping to boost exports 10%. As for Washington's appeal for other volunteers to shoulder a bigger share of foreign aid costs, the echoing silence was loud.

Britain wiped out import quotas on all but a handful of U.S. goods that have been barred or restricted for 20 years. Its gesture is expected to whet demand for American-style cocktail dresses and printed skirts, other readymade clothing of new, washable fabrics that are still high-priced in Britain. Novelties such as blue jeans, California apple juice, well-designed U.S. toys, and costume jewelry should also fare well. But Detroit automakers expect no gain, since steep British import duties and sales taxes, added to transport costs, double U.S. price tags. U.S. cars are considered too big, too flary, and too gas-thirsty compared to British makes. In fact, last year's 650-car U.S. import quota was not even filled.

France scaled down (from 30% to 27%) import duties on U.S. autos, electric razors, farm machinery. France is giving the U.S. the same reductions it gives its Common Market neighbors. Import quotas on about 200 items ranging from textiles to household appliances were also scrapped, and Pinay promised to junk all remaining import quotas within two years. Foreign-trade experts doubt that this will mean any sizable overall boost in U.S. sales in competition with heavily protected French industry.

Japan announced that within 16 months it will cancel restrictions on a wide range of dollar imports, including bourbon (though the Japanese prefer Scotch), TV sets, household appliances, autos and cosmetics. Biggest item will be liberalization of such vital U.S. supplies as soybeans, scrap iron, hides and tallow, which should capture an even bigger share of the Japanese market, boost total U.S. sales to Japan by 5% ($40 million).

Though domestically produced goods in Europe and Japan tend to be cheaper and better tailored to national tastes than most heavily taxed U.S. imports, some governments may even prefer to see real competition in some fields, e.g., textiles, rather than U.S. retaliation against their own dollar exports. Another effect of quota relaxations may be to prompt U.S. manufacturers to design goods specifically for European markets. Competition, said Antoine Pinay, is "the best of stimulants and the most effective of disciplines."

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