Trade Policy and Foreign Aid

Report Outline
Growing Support for Trade-Not-Aid Policy
U. S. Creditor Position and Trade Policy
Proposals for Expanding American Imports

Growing Support for Trade-Not-Aid Policy

Impending Review of U.S. Foreign Economic Policy

American foreign economic policy promises to become a subject of searching review and debate, later this year, when Congress takes up foreign aid legislation and legislation to renew the Reciprocal Trade Agreements Act. Both of the latter questions will enlist special attention as a result of the change of political control in the United States and as a result of growing agitation, in this country and abroad, for action that will permit a shift from foreign aid to foreign trade.

Evidence that the nations of Western Europe are chafing under a condition of continued dependence on American bounty has struck a responsive chord among members of Congress who are intent upon cutting foreign aid appropriations. Whether Congress will accept the other side of a policy of “trade, not aid,” and agree to measures that will promote an increased flow of foreign goods into this country, is a question that remains to be thrashed out. The trade involved in “trade, not aid” is trade that will earn dollars for other countries and so reduce their need for the contributions that have been coming from American taxpayers.

Observing in his inaugural address that “No free people can for long … enjoy any safety in economic solitude,” President Eisenhower pointed out that the United States not only needed foreign markets for “the surpluses of our farms and our factories,” but equally needed “for these same farms and factories vital materials and products of distant lands.” And he declared that, “Recognizing economic health as an indispensable basis of military strength and the free world's peace, we shall strive to foster everywhere, and to practice ourselves, policies that encourage productivity and profitable trade.” To that end, the President called in his State of the Union message, Feb. 2, for renewal of the Trade Agreements Act, expansion of imports of foreign raw materials, simplification of American customs procedures, and action by European countries “to allow greater exchange of goods and services among themselves.”