The Management of Foreign Economic Policy in Britain

Abstract

A NY remaining illusions that foreign economic policy was a less vital concern to, the British government than the 'high policy' issues of national security and national defence must finally have been dispelled during 1973. Throughout the last twelve months the front pages of newspapers in Britain and abroad have been filled with reports of prime ministers and presidents discussing trade and the international monetary system, of foreign ministers bargaining over funds for regional development, of cabinet ministers dashing abroad to barter exports for oil. The turmoil into which successful Arab actions to restrict the supply of oil and sharply to raise its price have thrown international economic relations, already shaken by a succession of upheavals over the previous two or three years, has made it evident to all that economic issues will be at the heart of foreign policy in the next few years. Yet for some twenty years after the Second World War international economic relations were relatively insulated from high foreign policy by the success of postwar arrangements in establishing a stable international monetary system and an acceptable set of rules for international trade, and by the continued support provided by the United States, the dominant economic power. Most successfully in the ten years from the mid-1950s to the mid-1960s, international monetary management was confined to a select group of national and international officials, with ministers of finance and governors of central banks playing a supervisory role. A similar club of international officials, with its own private language and its own set of shared assumptions, was responsible for the conduct of successive tariff and trade negotiations.' This insulation of economic