Front Page Titles (by Subject) 5.: Foreign Trade Agreements - Omnipotent Government: The Rise of the Total State and Total War
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5.: Foreign Trade Agreements - Ludwig von Mises, Omnipotent Government: The Rise of the Total State and Total War 
Omnipotent Government: The Rise of the Total State and Total War, edited with a Foreword by Bettina Bien Greaves (Indianapolis: Indiana, 2011).
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Foreign Trade Agreements
In the age of laissez faire commercial treaties were considered a means of abolishing, step by step, trade barriers and all other measures of discrimination against foreigners. In those days the most-favored-nation clause was a requisite of such treaties.
Then the tide turned. With the ascendancy of interventionism imports were deemed disastrous to a nation’s economic prosperity. Discrimination against foreigners then came to be regarded as a good means for promoting the well-being of a country. The meaning of commercial treaties changed radically. Governments became eager to overreach one another in negotiations. A treaty was valued in proportion as it hindered the other nation’s export trade and seemed to encourage one’s own. Most-favored-nation treatment gave way to hostile discrimination.
In the long run there cannot be such a thing as “moderate” protectionism. If people regard imports as an injury, they will not stop anywhere on the way toward autarky. Why tolerate an evil if there seems to be a way to get rid of it? Protectionism was bound to evolve into the license and quota system and into foreign exchange control. The ultimate goal of nearly every nation’s foreign-trade policy today is to prevent all imports. This means autarky.
It is vain to expect anything from purely technical changes in the methods applied in international negotiations concerning foreign-trade matters. If Atlantis is resolved to bar access to cloth manufactured abroad, it is of no importance whether its delegates must negotiate directly with the delegates of Thule, or whether the subject can be dealt with by an international board in which other nations are represented. If Atlantis is prepared to admit a limited amount—a quota—of cloth from Thule only because it wants to sell a corresponding quota of wheat to Thule, it is not likely to yield to a suggestion that it allot a part of this quota to other nations. If pressure or violence is applied in order to force Atlantis to change its import regulations so that greater quantities of cloth can be imported, it will take recourse to other methods of interventionism. Under a regime of government interference with business a government has innumerable means at hand to penalize imports. They may be less easy to handle but they can be made no less efficacious than tariffs, quotas, or the total prohibition of imports.
Under present conditions an international body for foreign-trade planning would be an assembly of the delegates of governments attached to the ideas of hyper-protectionism. It is an illusion to assume that such an authority would be in a position to contribute anything genuine or lasting to the promotion of foreign trade.
Some people cling to the belief that while universal free trade and a world-embracing division of labor are quite wrong, at least neighboring countries should enter into closer economic coöperation. Their economies could complement each other, it is argued, if they were prepared to form regional economic blocs. This doctrine, first developed by German nationalism, is fallacious.
As a rule neighboring countries offer similar natural conditions for production, especially in agriculture. Their economic systems are less likely to complement each other than to make them competitors on the world market. A customs union between Spain and Portugal, or between Bulgaria and Yugoslavia, or between Germany and Belgium would mean little. The main problems of foreign trade are not regional. The conditions for Spanish wine export could not be improved through free trade with Portugal, or vice versa. The same holds true for the production of machines in Germany and Belgium, or for agricultural production in Bulgaria and Yugoslavia.