Business: Free Trade v. the New Protectionism

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WALTER WRISTON: Twenty years ago, it was appropriate for the U.S. to enter a race with a weight on its back as a handicap. Our productive capacity was such that we did not have to worry too much. Now we are aware of the fact that other countries have not honored their commercial treaties. We are aware of the discrimination of the Common Market against American exports in some 23 cases.

D. McCULLOUGH: We are playing under entirely different ground rules, the Marquess of Queensberry rules v. street fighting. Our foreign competition uses street-fighting rules.

How big and bad are the nontariff barriers?

GARLAN MORSE: I don't think the nontariff barriers—import quotas, discriminatory taxes and the like—are understood by the public or by industry or even by Government. But these barriers are so important that just to renegotiate the tariff scales back and forth to bring some equilibrium does not solve the problem.

WRISTON: Administrative practices are a major difficulty. You ship fruit over to the Common Market, and they have one inspector on the pier. With that delay, the fruit spoils before the ship can be unloaded. They say that they are not discriminating against us—it just happens that the other fellow's brother graduated from college that day and he went to the ceremony with his sister.

D. McCULLOUGH: We in the textile industry cannot ship much into Italy. The customs inspector goes out to lunch, and he never comes back.

FLANIGAN: We shouldn't ignore the nontariff barriers that the U.S. has put in place. Let's not delude ourselves by suggesting that we have been simon-pure. But our barriers are nothing compared with theirs, and we have to make every effort to bring theirs down.

What barriers does the U.S. create for itself in foreign trade and investment?

WRISTON: The export of the American mentality along with our goods and services does us a great disservice. For example, the Trading with the Enemy Act gets everybody who has a foreign subsidiary into trouble. The nations where these subsidiaries operate want them to trade with certain countries, but U.S. law forbids it. You have to interview the shrimp to find out whether they are Communist or Hong Kong shrimp.

C.P. MCCOLOUGH: It is very difficult to operate around the world with our antitrust laws. We cannot select a foreign partner and say, "We are going to work with you forever." This leads to great difficulty for us because we have to write agreements that are short-term when we really intend them to be longterm. I don't know any other government that makes companies obey not only the laws of the foreign nations where they operate but also certain laws of the home country. We are unique in that.