INDUSTRIAL AND ENGINEERING
244
Trade Agreement Signed with Sweden O T T O W I L S O N , 3025 F i f t e e n t h
S t . , W a s h i n g t o n , D . C.
we imported $11,378,000 worth of un bleached sulfite wood pulp from Sweden, and $11,054,000 worth of t h e sulfate prod uct. As o u r total imports from Sweden in t h a t year were §33,949,000, these two items alone accounted for about 06 per cent of t h e whole trade. On t h e other hand, from the standpoint of t h e United States the "concession" can hardly be called more than nominal. The President has no power t o remove wood pulp from the free list, and there is small likelihood that Congress will do so, a s the depletion of our forest reserves has made it necessary to meet about half of our requirements for paper with imports, either of paper itself or of wood pulp and pulp wood. T h e rest of the tariff concessions made to Sweden relate t o a number of articles, the imports of which into t h e United States are small o r negligible, a n d to five o r six classes oi goods of which Sweden is a leading source of supply. On wire rods and on paper hoard and wall board notprocessed t h e existing rates of duty are bound against increase. O n several classes of high-grade iron and steel new rates are named which, in most cases, are about one-fifth lower than t h e old rates. " T h e imports of these highgrade products," says a State Department announcement, "made almost entirely by the wood charcoal reducing process and from exceptionally high-grade Swedish ores, are wholly insignificant compared with the enormous domestic production of ordinary tonnage grades of iron and steel. T h e Swedish products sell on a prestige basis at prices higher than the most nearly corresponding; grades of domestic iron and steel command." The d u t y o n wrapping paper is reduced one-sixth; on processed paper board (imports from Sweden) about 50 per cent; o n antifric tion ball and roller bearings, 2 1 per cent; on enameled household utensils, 2 S per cent; on unmanufactured granite, onefifth; on low-carbon ferrochrome a n d chromium metal, one-sixth; a n d on safety matches (plain stems), one-eighth. I n the case of none of these items except ball and roller bearings did o u r total i m ports in 1934 exceed $500,000; for t h a t item the figure was $698,000, of which $322,000 were imports from Sweden. T h e effects of these reductions o n American industry are minimized b y t h e S t a t e D e p a r t m e n t . Several of t h e a r ticles, it says, are virtually non-com petitive, as there is little or n o domestic production, a n d most of t h e others o n which rates are reduced have hitherto been imported in quantities insignificant in comparison with our own o u t p u t . T h i s is true of such articles as sponge iron, antifriction bearings, enamel ware, pliers, saws, stoves, e t c . O n others, i n U . S . Tariff C o n c e s s i o n s G r a n t e d t o cluding unmanufactured granite, anvils, Sweden scythes and sickles, and low-carbon ferro chrome, the percentage of imports t o No reductions a r e made in United domestic manufacture has been a t times States duties on chemicals o r chemical somewhat larger. I n t h e case of safety products. T h e only import items af matches the tariff act of 1930 raised t h e fected which have a direct connection d u t y from 8 cents t o 20 cents p e r gross with chemical industry a r e sulfate wood boxes, a n d one American concern greatly pulp, bleached and unbleached, a n d sulfite expanded its production. Previously wood pulp, unbleached. These a r e both on t h e free list and t h e agreement "binds" four-fifths or more of our supply of these t h e m there. Other chemical wood pulp, matches had come from abroad; in 1933 as well as mechanically g r o u n d wood about two-fifths were imported. T h e pulp, also on t h e free list, a r e n o t men present agreement cuts the d u t y from 20 tioned in t h e present agreement, as they to 17.5 cents on matches with plain (uncome chiefly from. Canada. colored) stems, in small boxes, a n d p r e sumably will stimulate imports. B u t The importance t o Sweden of t h i s pledge t h e State D e p a r t m e n t contends t h a t t h e not to impose duties on t h e t w o classes 20-cent duty represented in 1934 an a d of wood pulp mentioned is s h o w n b y a glance a t t h e t r a d e statistics. I n 1934 valorem equivalent of 94 p e r cent; t h a t
A
TRADE
AGREEMENT
with
Sweden
was signed on Ma ν 25 b v Secretary of State Hull and' hy W . Bostrom, Minister of Sweden in the United States. It is t h e product of many m o n t h s of negotiations, first announcement of which was made last Sept em her. The agree ment is to go into eFect 30 days after the exchange in Stockholm of ratifications hy President Roosevelt and the King of Sweden (with the consent of the R i k s d a g ) and is to remain in force for 3 years t h e r e after and then to continue indefinitely subject to a (i-month notice of t e r m i n a tion by either country. T h e terms of t h e agreement follow the usual lines of others in the present series already concluded. Concessions t a k e the form of tariff reductions and pledges not to rais*» the d u t y on certain specified items and not t o remove others from the free list. Since Sweden h a s been en joying a high degree of prosperity, a t least by contrast with most other coun tries, she has not found it necessary t o impose quota restrictions on imports or to >et up a system of exchange control. Ac cordingly no concessions relative to these measures were necessary in t h e agree ment. It does provide, however, that if either country shall adopt trade q u o t a s or exchange control in t h e future the other shall enjoy fair and equitable t r e a t ment determined on t h e basis of normal trade and financial conditions. I t also provides that, in general, no quota shall be established on articles on which conces sions are granted in the agreement; hut this provision is not to apply t o q u o t a s imposed under such measures t o restrict production as t h e N I R A in this country. Two important reservations included in t h e Belgian agreement are repeated in t h e present pact. One looks forward to possible currency depreciation a n d provides that, if either country finds its trade seriously affected thereby, i t can ask for a modification of t h e agreement, and if that cannot be brought about it can terminate the whole agreement on 30 days' notice. T h e other seeks t o safe guard each country against a possible flood of low-price imports from some third country t o which, under t h e mostfavored-nation policy, the tariff conces sions granted in the present bilateral agree ment are automatically extended. Either t h e United States or Sweden c a n with draw any concession, or impose quota re strictions on imports of t h e given article, if it appears t h a t a third country is getting t h e major benefit from t h e concession. Such action, however, opens the door t o a possible cancellation of t h e whole trade agreement on 30 d a y s ' notice if t h e change is not acceptable t o the other c o u n t r y .
VOL. 13, M ) . 11
CHEMISTRY
strike-on-the-box matches are only a minor factor in t h e match industry in t h e United States; t h a t t h e profits of t h e principal manufacturer in 1933, as shown by a Tariff Commission inquiry, were enormously high, and in 1934, although reduced, were still far higher than in most industries. "If t h e small reduction in t h e duty made b y this agreement," it adds, "should have a tendency to increase imports, a moderate reduction of t h e profits of t h e domestic producers and of some of t h e high salaries paid to their officials should enable them to moot this competition without putting a single American workman out of employment." S w e d e n ' s C o n c e s s i o n s t o the United States Sweden is a country of moderate tariffs, with a large free list. Most of her con cessions to the United States therefore consist in binding the present favorable rates against increase and agreeing to maintain certain articles on the free list. Altogether the agreement affects 64 different items. On 21 items duties are either reduced or abolished entirely. On 27 items the present rates are bound, and on 16 items Sweden agrees t o continue the present free admittance. The con cessions affect articles which in 1933 accounted for more than three-fifths of Sweden's imports from t h e United States. I t e m s on which duties are reduced repre sented 11 per cent of t h e trade, affected those bound against increased rates 30 per cent, and those bound on the free list 53 per cent. A number of articles of chemical i n terest are included in t h e concession listSome of them are exported to Sweden int considerable quantities. T h e following list shoAvs the tariff treatment under t h e agreement just concluded, and also t h e a m o u n t of imports into Sweden from t h e United States (based on Swedish s t a t i s tics) in 1930 and 1933. BAKING
POWDER.
The
duty
is
re
duced from 40 t o 30 Swedish crowns p e r 100 kg., or 25 per cent. (The value o f the crown varies from year t o year; foz* 1934 it was $0.2598. Kg. equals a b o u t 2.2 pounds.) Baking powder is o n e o f our leading exports to Sweden. Swedisti import figures show purchases of $154,11
