CHAPTER VI

PROHIBITIONS AFFECTING INTERNATIONAL TRADE

Importance of Trade Prohibitions. - Prohibitions were an important feature of commercial regulations in the days of Mercantilism. As has been stated, the importation of manufactures and the exportation of raw materials were often forbidden, and both these types of restriction were frequently reënforced by prohibition of transit trade. The purpose of such legislation was usually to encourage domestic manufactures and to foster an excess value of exports over imports, so that the precious metals might be imported to pay the balance.

Until quite recent years, transit prohibitions had all but disappeared from commercial politics of advanced nations, and export and import prohibitions had come to play a relatively unimportant rôle. They had been very largely replaced by customs duties based, by means of better statistical and technical knowledge, upon national industrial conditions and tempered by a more developed sense of international legal, social, and economic relations. It should be noted, however, that these duties sometimes had a prohibitory effect, and that direct prohibitions had not entirely disappeared. Most countries still applied them to certain imports and exports, either regularly or occasionally, either absolutely or conditionally; and, during the years just past, they have been resorted to by almost all nations as a measure of war control or of post-war readjustment.

In some countries it is customary to put trade prohibitions into operation largely by executive decree; but in most countries, including the United States and the United Kingdom, there are certain specific prohibitions in the tariff act coupled with a general power permitting prohibitory decrees or proclamations to be promulgated in special cases. Emergency legislation during the World War, however, even in these countries gave the executive complete discretionary authority as to prohibition of exports or imports.

To find all the trade prohibitions of a nation, it is necessary to search, not only tariff acts, but a wide range of legislative enactments, including those relating to quarantine, pure food, labor, trade descriptions, postal service, and explosives. This statement suggests the variety of motives which prompt the export and import prohibitions enforced by modern nations.

Export Prohibitions. - Export prohibitions are less numerous than import prohibitions, but they represent a similar range of purposes. Some are placed on raw materials clearly for the protection of domestic industry; for example, certain Canadian Provinces do not permit the exportation of timber cut from Crown lands until it has first been advanced to some stage of manufacture, such as sawn lumber, pulp, or paper. The Portuguese prohibition upon unmanufactured cork is directly in the interest of the domestic cork industry, but indirectly it serves a revenue purpose, since the finished product is subject to a productive export duty. Other measures are designed to safeguard the reputation of domestic products, as when a ban is put on the exportation of adulterated leather from Australia, adulterated kauri gum from New Zealand, or adulterated or impure rubber from the Belgian Congo. Such prohibitions as those in the United States against adulterated or misbranded food or drugs; in Switzerland against the export of matches made with white phos

phorus; in Japan against the export of brushes made of undisinfected animal hair; or in Australia and elsewhere against the export of uninspected or unfit meats, are in the interest of health as well as of a better market. The variety of export prohibitions which look to the conservation of plant and animal life is illustrated by embargoes placed in different countries on such items as plumage and skins of birds, horns of certain animals, timber cut from trees of less than a specified size, or animals for breeding purposes. These shade off imperceptibly into prohibitions upon the export of cattle to conserve the livestock industry of a country and into embargoes upon foodstuffs and necessaries in time of threatened famine or acute economic distress. Such crises may arise from military disturbances or from other causes. In the course of the World War, nation after nation, neutral as well as belligerent, turned to export embargoes as a means of exerting economic pressure, economizing shipping facilities, conserving the home supply of essential commodities, or regulating prices. Much of this régime of prohibitions carried over into the era of reconstruction. While it has gradually given way to more normal trade regulations, unsettled financial and political conditions have made for its survival, in some degree, in various countries, especially as a device for averting food shortage, meeting trade discriminations, conserving precious metals and other media of payment, or controlling prices in the face of a distorted exchange situation. In some sense as a by-product of the war came the eighteenth amendment to the Constitution of the United States, which prohibits the exportation as well as the manufacture, sale, or importation of intoxicating liquors for beverage purposes.

Import Prohibitions for Revenue and Protection. - Prohibitions upon imports are sometimes of a revenue character, notably in the case of government monopoly of certain articles

such as matches, tobacco, salt, explosives, and playing cards. The importation of such articles is either absolutely prohibited or is permitted only under stringent government regulations. Among the nations using this device to safeguard revenue from monopolies are France, Spain, Portugal, Italy, Greece, Japan, and some countries of South America. In cases of government monopoly of a specified commodity, the import prohibition may be extended to substitutes therefore; for instance, governments maintaining a match monopoly often forbid the importation of cigar lighters, igniters, and other substitutes for matches. Occasionally a government grants a monopoly to a private corporation which is held responsible for collection of internal revenue. Peru has adopted this policy with respect to opium, tobacco, denatured alcohol, and salt, and prohibited importation of these commodities by private persons.

The importation of some commodities is prohibited for purposes of economic protection, as, for example, the Canadian import prohibition of oleomargarine, butterine, or similar substitutes for butter, or the Polish prohibition upon the importation of "completed motor cars.' completed motor cars." The aim of the former is ostensibly to protect Canadian dairy interests, while the purpose of the latter is to assist Polish manufacturers of motor car bodies. A Spanish decree in 1922 established a prohibition upon the importation of wheat and wheat flour to remain in effect until a stipulated minimum price for wheat had been maintained in the home market for at least one month.1

Import prohibitions are also frequently invoked to protect plant and animal industries from the menace of disease from abroad. Thus from 1875 to 1910 France excluded American potatoes for fear of the potato bug. Aroused by an epidemic

1 A survival of the sliding scale principle which characterized the old English Corn Laws. See GREGORY, Tariffs, 133-142.

of foot and mouth disease in the United States some years ago, Canada forbade the importation from this country of all cattle, sheep, goats, or parts thereof, and all hay, straw, fodder, and manure." Many wine countries prohibit importation of vines, because of phylloxera; but vines from the United States are usually exempted from such prohibition as being immune. The laws of the United States specifically prohibit the importation of insects, birds, and animals injurious to the agricultural and horticultural interests as well as adulterated or unfit seeds for many staple farm crops. Plants and nursery stock and viruses, serums, and toxins for the treatment of domestic animals are admissible only under permits issued by the Secretary of Agriculture.

Many countries protect home labor by prohibiting the importation of prison- or pauper-made goods. The American tariff states" that all goods, wares, articles and merchandise manufactured wholly or in part in any foreign country by convict labor shall not be entitled to entry at any of the ports of the United States."

Many tariff laws contain import prohibitions of publications which infringe upon domestic copyright and of merchandise falsely labeled with a domestic trade mark. The American law excludes piratical copies of copyrighted works (Section 30, Act of March 4, 1909) and all " articles which shall bear a name or mark calculated to induce the public to believe that the article is manufactured in the United States, or that it is manufactured in any foreign country or locality other than the country or locality in which it is in fact manufactured." (Section 27, Act of February 20, 1905.)

Import Prohibitions Based on Sanitary Grounds.

While,

as we have seen, prohibitions may be for the purposes of revenue or protection, they are more often based on grounds of sanitation, morality, or public security. Many states prohibit the importation of articles regarded as dangerous to