CHAPTER XXII. PREFERENTIAL TARIFFS.

Preference to our Colonies involves putting on tariffs against the outside world. Disguise it as we may, it is Protection.

THE proposal of Preference to parts of the British Empire over the outside world is not a new one. It prevailed for two centuries from the passing of the Commonwealth Navigation Act, and was abolished only by the Whig Government which succeeded Peel’s, and received his support. But there was this difference at any rate. Nobody thought of calling it Free Trade. It was part of the Protective system under which we lived.

Suppose we now resume the discarded principle of Preferential Tariffs. It is not capable of being carried out unless there is a tariff on which to give a preference—“the penniless traveller sings in the presence of the robber.” Thus, as the first step in Preference, we must impose a tariff. In the long contest between the Colonies and ourselves whether they are to adopt Free Trade or we are to resume Protection, the Colonies have won. The voices of Canada and Australia have shouted down the old country.

We resume Protection then.¹ But it is a very peculiar Protection. Germany and America justify their protective system, and escape its worst evils, by the fact that they have Free Trade within their Empires. The United States is by far the largest Free Trade unit in the world—some of her 45 states are larger than the entire German Empire—and it may very reasonably be contended that her prosperity is due, not to Protection, but to this Free Trade. But we are not to have free trade within our Empire. Every constituent member of it is, apparently, to have the liberty of erecting what tariff it likes against other members, so long as its duties are lower to Great Britain and to British possessions than they are to the rest of the world.² It is best described as a British Empire Series of Reciprocity Treaties.³

Disguise it as we may, it is preferential treatment for themselves against the world outside the Empire, that this small group of self-governing colonies is asking. One might even say that it is Protection for Canada and Australia. We are to impose a tariff against the world, not because we want to shut the world out, but in order that we may take the tariff off the Colonies. Considering that the imports from Canada and Australia into this country amount to £42½ millions, and that the imports from all the six self-governing colonies put altogether amount to only £59,800,000; while the imports from the Free Trade portion of the Empire amount to £47,200,000, and the imports from foreign countries to £421 millions, the demand needs looking into.¹

¹It shows what a hold the word has on the unpleasant memories of the nation, that the name of Protection should be vigorously protested against. Just as Mr. Gladstone thought that he had gained something when he replaced the word Boycott by the word Preferential Dealing, so do many try to insist that Preferential Tariffs are not Protection. We want to admit our kinsmen free to our house; if we emphasise it by shutting the door in the faces of our friends—well, it is merely a regrettable incident!

²Even this is not clear. New Zealand proposes to give a preference to Great Britain, but she adds that the same preference will be given to any country which gives her equal terms. All the time, so far as one can make out, Great Britain is the only part of the Empire which is not to have this privilege, but is always to give a preference to the Colonies whatever they do.

³At present the scheme has scarcely advanced beyond the enunciation of the principle. What, for instance, is to be the relation of one colony to another, or of the self-governing colonies to the other colonies, or of any colony to a “possession”; whether India and the Crown colonies are to remain free trade or to put on tariffs; whether the Protectorates, or countries in the anomalous condition of Egypt, are to be included; whether there is to be preference as regards all the imports taxed; or even what the position of revenue taxes is to be:—all these are details waiting the mandate of the country before they are discussed. One might hint that the possibility of such a scheme—to say nothing of its advantage—depends on the working out of the details.

¹See Annual Statement of Trade (Cd. 1617), 1903, vol. ii., p. 6, and Board of Trade Blue Book, p. 408.