Allied economic conference in Paris

On 14 June 1916 the economic conference of the Allied states opened in Paris. It had been announced by the March inter-Allied conference, which instructed government representatives to propose measures by which the Allies would put into practice their “solidarity of views and interests” in the economic sphere as well. Delegates of eight states came: France, Britain, Russia, Italy, Japan, Belgium, Serbia and Portugal. The deliberations lasted four days, until 17 June, behind closed doors.

The delegates

The guests were received at the Foreign Ministry on the Quai d’Orsay by the French Prime Minister, Aristide Briand. The deliberations were chaired by the French Minister of Commerce and Industry, Étienne Clémentel, who sat with, among others, the Minister of the Colonies, Gaston Doumergue, and the Minister of Public Works, Marcel Sembat. Britain was represented by the Lord President of the Council, Lord Crewe, the Colonial Secretary, Andrew Bonar Law, the Prime Minister of Australia, Billy Hughes, and the Canadian Minister of Trade and Commerce, George Foster. The President of the Board of Trade, Walter Runciman, a determined free trader, could not come, which the supporters of protective tariffs saw as a success of their own. Italy sent its ambassador in Paris, Tommaso Tittoni, and the Finance Minister, Edoardo Daneo; Russia the State Controller, Nikolai Pokrovsky; Belgium the Prime Minister, Charles de Broqueville, with three ministers; Serbia the Minister of the Economy, Vojislav Marinković; Portugal the Finance Minister, Afonso Costa, and the Foreign Minister, Augusto Soares; and Japan the former Finance Minister, Baron Yoshirō Sakatani.

Briand opened the deliberations with a speech. “To win is not everything,” he said. Alongside their military and diplomatic alliance, the Allies were now to conclude an economic union that would ensure them the development of their resources and the exchange of their products. The war had shown, in his view, how close the enemy had come to imposing economic servitude on the world. If past mistakes had allowed this, they had to be abandoned and new paths taken. He also recalled the great task of rebuilding the countries that had suffered occupation, and announced that part of its cost would be borne by the defeated enemy.

The resolutions

The conference unanimously adopted recommendations to the governments. The preamble stated that the Central Powers were preparing a struggle in the economic field after the war, aimed at domination over the production and markets of the whole world. In view of this the Allies, “in the name of necessary and legitimate defence”, were to organise their economic alliance on a permanent basis. The recommendations were divided into three groups.

The first concerned wartime. The Allies were to unify their prohibitions on trading with the enemy, ban the import of all goods originating in or dispatched from enemy countries, annul harmful contracts with enemy subjects, and place enterprises belonging to them under sequestration or control. They were also to unify their contraband lists and export bans, and to sell goods to neutral countries only when organisations such as the Netherlands Overseas Trust guaranteed that they would not reach Germany.

The second group concerned the period of reconstruction after the war. Countries devastated by the enemy were to have priority of access to Allied resources. For several years after the conclusion of peace the Central Powers were not to enjoy most-favoured-nation treatment, and their trade was to be subject to prohibitions or other restrictions that would make dumping impossible. The third group provided for permanent measures: the Allies were to make themselves independent of the enemy for the supply of raw materials and essential manufactures, facilitate trade, transport and communications among themselves, and unify their patent and trademark law. They could achieve this by means of tariffs, subsidies or assistance for scientific research, but with the reservation that each country would do so “having regard to the principles of its economic policy”. According to the Annual Register, this wording was included at the British request, so as not to commit Britain to abandoning free trade.

Disputes and fears

Behind the scenes different views clashed. The American ambassador in Paris, William Sharp, learned that the most far-reaching proposals came from Hughes, and that the Russians and Italians were reluctant to accept the harsh British drafts. Italy was not yet even at war with Germany. As early as April Sakatani had confided to the American ambassador in Tokyo that he did not support a union that would divide the world of trade into three hostile camps: the Entente, the Central Powers and the neutrals. Secretary of State Robert Lansing replied that Washington shared these fears and would regret any agreement that restricted Japan’s trade with the United States. Already in March the State Department had instructed the embassy in Paris to follow the preparations for the conference discreetly.

The resolutions were not binding. Each government was to decide for itself whether and how to put them into effect. At the close of the deliberations the Belgian Prime Minister gave assurances that the Allies were forming “a defensive union against war”, not preparing a war. When the text was published, however, the press began to write of plans for a “war after the war”, that is, an economic boycott of the Central Powers even after peace had been concluded.