World Customs Tariffs – post World War 1

August 23, 2011 — Leave a comment

I came across a document prepared by the Canadian Reconstruction Association titled – Tariff Policies Throughout the World – published in 1921. It comprises a survey of tariff legislation since the armistice (end of WW1), which shows that every important country in the world was protecting its own industries and striving to reduce its dependence upon outside sources of supply, and that “Protection” is established and accepted as the fiscal policy of the nations of the world more generally and firmly than ever before.

The story told by these tariff developments is absolutely one-sided, a world-wide resort to tariff protection, recognition of the value of industrial development and of the home market, and a general strengthening of protective systems.

Two significant statements by the governments of the day bear testimony to this fact. The Spanish Government summarized cogently the world tariff situation at the time: “Many countries have taken and are taking measures to prevent the invasion of their markets by foreign goods; tariff barriers are being raised and other restrictive measures adopted on all sides; the situation is developing towards a worldwide tariff war. The new customs tariff is an instrument prepared for use in a tariff war, if necessary.” Not less worthy of heeding is a statement issued by the Australian government: “customs duties which are not high enough to be effective are worse than useless.”

What a strange contrast to today’s circumstances where the WTO seeks at all costs to ensure the dismantling of all barriers – tariff and otherwise. Now read what things were like in our own backyard.

SOUTH AFRICA

Conditions during the war were, in effect, such as would have obtained under an almost prohibitive tariff and as a result the industries of South Africa experienced a tremendous development. The Minister of Finance in his budget speech in 1920, stated that no less than 2,000 new factories had been established in that Dominion since the fiscal year 1915-16, that in the past four years industrial production had increased 50% and that the country was advancing rapidly in the direction of becoming self-supporting in respect of all the necessaries of life. Protectionist sentiment in the Union is strong.

The budget introduced into the Union Parliament on April 15, 1921, provided for an increase of various customs duties, and the Government has announced its decision to appoint an Advisory Customs Tariff Board which will be called upon, among its other functions, to report on “what steps may be necessary to assist and develop the industries of the Union.”

Two recent developments indicate the attitude of South Africa in regard to protection and encouragement of domestic industries. In the Spring of 1921, in order to protect the shoe manufacturing industry of South Africa, principally against competition from the United Kingdom, the Government prohibited the importation of leather footwear, except under license, with the provision that licenses should be issued only for the importation of such shoes as the South African manufacturers were unable to produce. By a proclamation of May 11, 1921, the Government brought certain goods within the scope of the “dumping” clause of the Union customs tariff and the “dumping” duty has now been made applicable to wheat, flour, and wheat meal imported from Australia, the amount of such duty to equal the difference between the price at which these products are sold for home consumption in Australia and the price for which they were sold for export to South Africa, except that, as under the Canadian Customs Act, the special or dumping duty must not exceed 15 %.

The policy of the present South African Government (circa 1921) is frankly to enable South African industries to continue in operation, to encourage new manufacturing industries and the utilization of the resources of the Dominion, and to prevent the Union from becoming a dumping ground for other countries. While the question of revenue is being kept in mind, the maintenance of South African industries is regarded as still more important in the interests of the country as a whole. Source: Internet Archive

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