The Present German-Polish Tariff War

Three years ago my major professor, Dr. Knute Carlson stated in a class lecture on the foreign trade of Poland, that to his knowledge not any American student has comprehensively worked up a study on the outstanding commercial and treaty policy developments at that time in progress between Germany and Poland. Inspired by this remark, the writer of this thesis investigated this field and found it to be of such a source of valuable information and so fascinating a subject that he chose to discuss the German-Polish tariff conflict and the negotiations for a commercial treaty in his master's dissertation.The conclusion of a commercial treaty in order to secure mutual advantages or special concessions is often a complicated procedure and requires long preparation and extended negotiations. By the granting of the most-favored-notion treatment not only the interests of the two contracting countries are affected, but this privilege automatically extends to such countries which are entitled to the same treatment on the basis of concluded treaties or arrangements. Hence the most-favored-nation clause is the cardinal point in commercial treaty negotiations, in one of the following chapters of this discussion it will be found how Germany and Poland fought over this point. Furthermore how careful Poland was not to bind herself too strongly in commercial treaties with other countries, Poland probably has one advantage over Germany in that her conventional duties are established on a percentage basis. As soon as she moves her general rates upwards, the conventional rates will also move upwards in the same proportion. Germany, however, has fixed conventional rates and can only modify them in agreement with the contracting party, which mostly means new bargaining. Both countries and any other country are interested in that their exported goods are taxed as little as possible and that the flow of the goods is not hampered by artificial restrictions. Thus the treaty negotiations are for the purpose to find a compromise and it is this finding of the compromise that is one of the most complicated tasks in the treaty negotiations. Each country naturally tries to represent its interests as strongly as possible and if things march the other way a latent conditions arises which may lead to interruptions in the treaty negotiations and finally to a tariff war. Retaliatory measures are applied and a source of difficulties is opened, which is injurious to the trade of the two countries at war and may affect other surrounding countries and even the trade in general. A typical example of a disastrous tariff war, causing a number of changes in the European trade, is therefore discussed in the following chapters.