Problems of Expanding International Trade
THE major problem of the postwar period in the field of international trade has been to remove the imbalance between the United States and the rest of the world at a high enough level to permit economic progress. This problem in turn is importantly related to the level of trade among the nondollar countries since this determines alternative sources. The imbalance with the dollar area has been most conspicuous in western Europe, which at the end of the war found itself both short of the resources for reconstruction and lagging behind the United States in the export of manufactures. No other area had been so dependent upon exporting manufactures to procure food and raw materials. The imports of the United Kingdom, for example, rose from 11 per cent of its national income in 1820 to 38 per cent in 1880; and the proportion, after falling to 22 per cent in 1937 largely because of a favorable movement in the terms of trade, rose again to 34 per cent in 1951.
During the nineteenth century, Europe did a very large proportion of world trade in manufactures. The United Kingdom, France, and Germany were still responsible for 60-65 per cent in 1913. The British share was steadily decreasing, being about 38 per cent in 1876-80 and 29 per cent in 1906-10, but it was a declining share of a more rapidly growing trade. World trade in manufactares increased threefold between 1880 and 1913.