Studies in United States Commercial Policy

By William B. Kelly | Go to book overview

CHAPTER IV
United States Commercial Policy and the Domestic Farm Program

The United States has encountered one of the most stubborn problems of governmental policy in attempting to reconcile its domestic farm programs with its declared purpose of promoting expanding opportunities for international trade. The trade and the farm programs were born together in the midst of the depression of the 1930's and have grown up side by side. Under the farm program the government has attempted to stabilize farm income through measures of governmental intervention in the market--measures that in recent years have increasingly led to the use of import restrictions, export subsidies, and increased tariff protection in the form of import fees.

Under the trade-agreements program the government has sought to stimulate the freer flow of international trade, principally by seeking agreement with other countries to reduce or remove governmental barriers of the same type employed in connection with the domestic farm program. This chapter is concerned with this conflict between the two programs and deals with (I) the beginnings of the conflict prior to World War II; (2) the broadening of the agricultural and trade programs during and after the war; and (3) the widening of the conflict since 1948.


1. BEGINNINGS OF CONFLICT BETWEEN TRADE POLICY AND AGRICULTURAL PROGRAMS

It would be easier to convey an idea of the conflict between the agricultural and trade-agreements programs if one could impute to each the extreme objective that might be deduced by carrying some of its underlying principles to their full, logical conclusion. For example, assume (1) that the trade-agreements program had aimed at establishing complete freedom of trade, without material governmental influence over the economic processes that determine the location of industry between or within nations; and also (2) that the agricultural program had aimed at establishing thoroughgoing governmental control of agriculture so as to create an arbitrary pattern of national farm output, prices, and income wholly unrelated to the pattern that could be expected to result from a

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