(2 of 3)
The British insist that they scrupulously adhere to the U.N. embargo on shipments of war materials, but their assurances leave scope for convenient "exceptions." Whitehall's definition of the term non-strategic is more elastic than the State Department's. Example: Britain regards railroad equipment as non-strategic; the U.S. officially bans everything, so far as its own traders are concerned, and has persuaded its European partners to ban 260 items as strategic.* Most dismaying of all in Britain's case, the Foreign Office admitted that until very recently it had turned a blind eye towards British flag vessels shipping war goods to Communist China, so long as their cargoes were loaded in ports outside Britain and the colonies.
FRANCE reported glumly that its trade with Eastern Europe has plummeted to about half what it was in 1938. Franco-Russian trade talks are slated for next week, and Bernard de Plas, a right-wing businessman who believes in "trade regardless of political regimes," is flying to Peking, via Moscow, as the guest of Nan Han-chen, president of the People's Bank of Red China.
WEST GERMANY, encouraged by the success of a $40 million trade compact signed with Red Bulgaria, announced "direct consultations" with the Kremlin; Ruhr manufacturers dreamed of the good old days when Hitler's Drang nach Osten sent 12% of all German exports off to the East.
GREECE was getting ready to swap tobacco for Polish coal; ITALY could not resist Bulgaria's bid for lemons. JAPAN industrialists, noting that U.S. coal and iron ore costs them more than twice as much as the nearer but unavailable supplies ofo the Red mainland, bluntly say: "There is no hope for the Japanese economy until trade can be resumed with China."
Look East, Old Europe. Next to the Iron Curtain, European and Japanese traders resent the thickets of U.S. tariffs and import regulations. Said a Japanese: "The Americans tell us not to trade with the Communists . . . then they turn around and raise their duties on tuna and silk scarves. It doesn't make sense."
The Communists know it, and at last month's Geneva conference of the U.N. Economic Commission for Europe (ECE), they turned it to their own advantage. Red Rumania offered to buy generators and transformers—the very items that the U.S. had just refused, under the Buy American Act, to buy from a British firm which had placed the lowest bid for the Chief Joseph Dam contract in the State of Washington (TIME, April 27).
¶Bulgaria wanted vegetable oils; the U.S. has just imposed a stiff import quota on tung oil after spending thousands to teach the Paraguayans how to grow it for the U.S. market.
¶Within days of the U.S. decision to embargo imported dairy products, Russian trade agents snapped up Swedish dried milk.