Personality, Ideology, and Interest

in the Origins of the Modern World Trading System:

The Case of Stafford Cripps and Will Clayton

Paper presented to The Historical Society

Annual Conference – “Historical Reconstructions”

Atlanta, Georgia

May 2002

James N. Miller[1]

Bard College

Introduction

“Will Clayton was tall, strikingly handsome, beautifully attired, articulate, affable, assured and stubbornly his own man to the extent that he was not controlled by his always stubbornly liberal wife” – John Kenneth Galbraith, American economist, wartime official, and diplomat.[1] “To sin against the pure milk of the doctrine (which was normally whatever Clayton thought America could agree to) was [in Clayton’s view] the ultimate crime” – Harold Wilson, British trade minister, later Prime Minister.[2] “[A]lmost a saintly character” – Emilio Collado, US official.[3] “Doctrinaire Willie” – Hugh Dalton, British Chancellor of the Exchequer.[4] “I tried to offer him the position [of Secretary of State] and he wouldn’t even discuss it” – President Harry S. Truman.[5]

“Cripps was a man of immense integrity but it was an integrity of that dangerous sort that assumes that its possessor is the only man capable of giving the country the leadership it needs.” – Francis Williams, British prime ministerial press adviser.[6] “[I]n almost all respects an outstanding character. ... a wonderful man to work for” – Robert Hall, British civil servant.[7] “[C]allous and contentious ... [a] self-righteous man” – Clair Wilcox, US trade negotiator.[8] “[A] tremendously kind and generous man, not without a pleasant sense of humour” – Edwin Plowden, British civil servant.[9] “It was very tough to get him to agree to something, but after he came to an agreement he was very cooperative” – W. Averell Harriman, US diplomat and Governor.[10] “There but for the grace of God goes God” – Prime Minister Winston Churchill.[11]

William Lockhart Clayton, the American self-made businessman in government: of sunny and charming disposition, unfailingly polite, dedicated to free enterprise and free trade. Sir Richard Stafford Cripps, the wealthy British lawyer-turned-politician: ascetic and intense, possessed of a wintry cordiality, incorruptible, committed to socialism and ‘planned’ international exchange. In the years immediately following the Second World War, personality, ideology, and differing national interests brought these two men into conflict over questions of world trade, putting severe strains on the Anglo-American alliance.

The international trade negotiations that took place in Washington, Geneva and Havana between 1945 and 1948 resulted, ultimately, in the institutionalisation of the General Agreement on Tariffs and Trade (GATT). The GATT, agreed in Geneva in 1947, was originally intended merely as a preliminary to the establishment of an International Trade Organization (ITO), for which a charter was agreed in Havana the following year, but which did not come into being. The supposedly ‘interim’ Geneva agreement survived and governed much of the world’s trade (which expanded significantly under this regime), until it was replaced by the World Trade Organization (WTO) in 1995. 

Orthodox explanations for the efficacy of the GATT suggest that the institution’s longevity is testimony to the free trade principles upon which it is based.[12] In this light, the predominantly American architects of the system figure as free trade visionaries who benevolently imposed post-war institutions of international co-operation on their war-devastated allies, helping protect democratic values in the process. Yet the GATT included key exceptions to the principle of non-discriminatory free trade. However, accounts critical of the post-war trade order tend to share the opinion that it was imposed by the US, even if, as is sometimes suggested, free trade principles were thus applied selectively in order to benefit America.[13] We offer a major qualification to this shared assumption, arguing instead that the success of the GATT has been crucially dependent upon its ability to generate pragmatic policy and trade gains via its unique procedural formula.  An effective institutional procedure, not free trade dogma nor American hegemonic power, has proved key to its endurance – and this feature has been in place since the institution’s inception. We argue further that it was principally the major trade gains that the United States won under the multilateral negotiating system – rather than, as Thomas Zeiler asserts,[14] national security considerations – that explain the American decision to sign the GATT in spite of the failure of US hegemonic imposition.

This paper, then, explores the historical origins of the GATT, in order to cast light on the question of why this key international organization endured and strengthened over time. It does so by exploring the perspectives of two figures who, we suggest, had a vital influence on its birth. The United States and the United Kingdom, as the world’s first and second most powerful trading nations, were the key powers in the Geneva and Havana negotiations, although they were by no means always able to determine the course of the negotiations. William L. Clayton was the Americans’ chief negotiator; Sir Stafford Cripps led the British. Although neither man took day-to-day control of the negotiations, both were responsible for establishing the broad lines of policy pursued by their respective countries, and made crucial interventions. The ideological differences between the two, reflecting those of their governments, do much to explain the final result of the negotiations. Differences in style and personality also proved decisive; arguably, it was their troubled personal relationship that was the key to the talks’ anomalous but durable outcome.

International relations theory, in its attempts to explain how trade negotiations work, leaves little room for the personal dimension of diplomacy. There is a tendency to view such negotiations simply as the means by which stronger powers foist their wishes on weaker ones, those wishes being determined by the supposedly transparent ‘interests’ of the powers concerned. Judith Goldstein has recently pointed out that political and economic ideas, as well as interests, are important in determining nations’ trade policies.[15] However, the personalities of politicians and diplomats can also prove crucial, not least in determining governments’ perceptions of other governments’ motives, interests and ideas. Personality is not, of course, the end of the question. In the case of Clayton and Cripps, other factors, such as partially predetermined positions, governmental structure, and differing assessments of national economic strength, conditioned our two protagonists’ room for maneuver in dealing with domestic constraints, and hence with each other. But it was the specific way in which they as individuals conducted the negotiations that caused the Havana talks to end with Anglo-American relations mired in mutual suspicion on economic questions, with the consequences that followed for the ITO.

Although the contrasting roles of Cripps and Clayton have never been subject to an explicit comparison, it cannot be said that there is a dearth of published material on the on negotiations in which they took part. Two contributions stand out. Richard N. Gardner’s Sterling Dollar Diplomacy, first published in 1956, is in many ways a model of contemporary history. However, it relies almost exclusively on published sources for its account of British thinking, and its at times polemical tone was clearly conditioned by its author’s acute sense of disappointment at the failures of Anglo-American co-operation.[16] Thomas Zeiler’s more recent Free Trade Free World, by contrast, is based on a commendably thorough review of national archives unavailable when Gardner was writing. It is, however, analytically flawed. In posing the question in terms of American ‘ideological free traders’ versus British (and other) ‘protectionists’ he overlooks the complexities of both countries’ positions.[17] The aim of this article, then, is not only to demonstrate the personal impact of its subjects on the course of the post-war trade negotiations, but to show the ways in which both Cripps and Clayton contributed to and reflected the trade ideologies of their respective governments – ideologies which, it is argued, were considerably more subtle and intricate than has traditionally been allowed.

Cripps and Clayton, 1880 – 1940

Clayton (1880 – 1966) was born on a cotton farm near Tupelo, Mississippi, the third of four children and the eldest son of James Monroe Clayton and Fletcher Burdine Clayton.[18] The Claytons were poor. Just before his thirteenth birthday, Will needed to supplement the family income and so took a job at the County Court, where a combination of personal initiative and chance led to his early introduction to the tariff issue. Over time he diligently set aside money to pay for lessons in typing and shorthand, which he soon mastered.[19] His skills then put him in high demand by guests at the local hotel who needed a secretary. One of these men was William Jennings Bryan, later three-times Democratic presidential nominee. Bryan asked Clayton to type a speech. “Bryan’s speech attributing the ills of the South and the cotton farmer to the high tariff created such a ferment in Will’s mind that at home he talked of nothing else for days.”[20] The pursuit of freer trade would become the dominating theme of Clayton’s political life.

        Unlike Clayton, Cripps (1889 – 1952) had family political connections. He was born in London, the youngest of Alfred and Theresa Cripps's five children.[21] His father would become a Conservative MP and later, as Lord Parmoor, a cabinet minister in the Labour governments of 1924 and 1929-31. His mother’s sister, Beatrice Potter, in 1892 married Sidney Webb – a socialist intellectual partnership that became famous. But, for Stafford, his parents’ Christian values were a more significant influence. His mother died suddenly when he was four, leaving instructions that her children be raised “to be undogmatic and unsectarian Christians ... taking their religious inspiration directly from the spirit of the New Testament.”[22] This upbringing was the key to the high-minded fervour and personal asceticism that would mark Cripps’s practice of politics.

        Schooled at the élite Winchester College, he turned down a scholarship at Oxford University in chemistry, opting instead for the superior research facilities of University College, London. Far from being a budding Lenin, he was socially conservative, a patriot, firmly anti-Liberal, and an imperialist.  Yet he also agonised about his own wealth, and worried about the spiritual plight of “the poor slum-beings.” He believed that the divine spirit could be regenerated in the poor by the provision of good, clean surroundings, and had emotional leanings in the direction of socialism.[23] On the issue of trade, Cripps seems to have come down for protection. His father had favoured it long before Joseph Chamberlain launched his Tariff Reform campaign in 1903. (Chamberlain argued for a system of preferential tariffs designed to bind the British Empire together.) There are some signs that Cripps was not persuaded by the Liberal anti-tariff case.[24] But if he can hardly be said to have had a well-formed and sophisticated opinion – and indeed his overall outlook would yet undergo radical change – it is still significant that, unlike Clayton, he did not develop an early conviction in favour of free trade.

By the time that Cripps finished university, Clayton, the older of the two, had already been in business in his own right for some years. He had teamed up with others to form Anderson, Clayton & Co. (ACCO) in Oklahoma City in 1904, and he proved to be the driving force in the firm. His fanatical dedication to the business, his innovative methods, and his speculative knack, helped the company exploit the increased European demand for cotton that resulted from WWI. In 1916, ACCO’s headquarters moved to Houston, Texas; and in 1918, Clayton gained a brief experience of government when he was invited to join the War Industries Board as a dollar-a-year man, to help expedite the distribution of cotton.[25]

        While neither Clayton nor Cripps fought in the First World War, they both first came to public prominence during the 1920s. The first dozen post-war years were notable for Clayton’s well-publicised  and ultimately successful campaign for ‘Southern delivery’ - the demand that cotton sold on futures contracts could be delivered to Southern ports, instead of, as the existing rule stipulated, to New York only.[26] Cripps’s route into the public arena was rather different. He was called to the Bar in 1913, and by the mid-1920s he was well established in his career as a lawyer. In 1927 he reached the height of the barrister’s profession, becoming Britain’s youngest King’s Counsel. However, during the twenties, Cripps initially put his surplus effort into religious work for the World Alliance for Promoting International Friendship through the Churches; and it was only after this highly idealistic movement foundered that he became receptive to the idea of joining the Labour Party.

        However, he went into active politics much earlier than did Clayton. In 1930, Ramsay MacDonald, the Labour Prime Minister, needed a new Solicitor-General, a ministerial post which had to be filled by a lawyer. Cripps was appointed in October 1930 – taking the knighthood that traditionally goes with the job – and went into parliament at a by-election the following January.  When, in August 1931, in the midst of a financial crisis, MacDonald resigned the Labour government’s commission, only to form a new National government in alliance with Conservatives and Liberals, Cripps declined the Prime Minister’s offer that he continue in his post. Instead, he remained loyal to the majority of the Labour Party, which was now excluded from the government, and which was heavily defeated at the subsequent general election (although Cripps retained his own seat). These political events, combined with the ongoing world economic crisis, led Cripps to swing violently to the left. In 1932 he helped found the Socialist League, an internal party pressure group which became largely his personal instrument. Growing “more intense and ascetic every day”, he spoke the language of class war and inevitable collapse of capitalism.[27]

Indeed, the differing lessons of the inter-war crisis drawn by Cripps and Clayton explain much about their subsequent attitudes to the problems of the world economy in the 1940s.  The two men, naturally enough, had rather different perspectives on these questions, although both believed that trade rivalries between nations were the cause of war, and that the remedy lay in international economic co-operation. Clayton’s stance was strongly influenced by his view of the impact of the depression on the market for cotton. In October 1931, he argued that the collapse of the cotton-price was not caused by “so-called overproduction;” nor could it be cured by government schemes to enforce cuts in output or to otherwise artificially bolster the price. Government intervention in the cotton market, together with artificially high wages for unionised industrial workers (at the expense of the agricultural population), had exacted a devastating toll.[28]

        These beliefs made Clayton hostile to the New Deal, implemented by Franklin D. Roosevelt’s incoming Democratic administration after 1933. Although Clayton was an instinctive Democrat,[29]  FDR’s domestic programmes caused his allegiance to waiver. He joined the anti-Roosevelt American Liberty League, serving on its executive committee from September 1934 to June 1935.[30] It was the trade issue, and the leadership of Roosevelt’s Secretary of State Cordell Hull, that played the crucial part in bringing Clayton back into the Democratic fold. Hull’s Reciprocal Trade Agreements Act (RTAA) of 1934 – which had to be renewed periodically – was a huge step, which virtually handed the power to alter the tariff from Congress to the Executive. It empowered the President (in practice the State Department) to enter into trade agreements with foreign countries for the reciprocal lowering of tariffs and other trade restrictions. The act permitted a significant reduction of US tariffs, although no one duty could be reduced by more than 50%. At first Clayton dismissed the RTAA as a mere gesture, but in due course he acknowledged the progress made under it as “at least a step forward.” The attacks of Alf Landon, the 1936 Republican presidential candidate, on Hull’s policy, clinched Clayton’s move into the Roosevelt camp.[31]

        Indeed Clayton was no mere reactionary, and was prepared to admit that the capitalist system as it stood was not perfect. He believed that “Liberty of person, of speech and of press are only possible under a system of private capitalism.” Yet he criticised capitalism’s abuses, amongst which he counted “The wasteful vanity-inspired expenditures of some rich people,” “credit abuse” and its “handmaiden, unbridled speculation,” and “clogged trade channels.” He believed that, whereas tariffs should be “taken out of politics,” the other problems were legitimate targets of government intervention.[32]

        Cripps, for his part, believed that attempts to reform capitalism, in the way that Clayton favoured, were doomed. This meant that he was opposed to New Deal-type economic solutions. When, in 1933, Time magazine reported that he was “an avowed disciple in Britain of the methods of President Roosevelt,” he was eager to stress that the suggestion was “entirely wrong”: “I believe ... that no amount of controls or financial experimentation can make capitalism successful.” He was certain that the American people would come to see the necessity of socialism “not only from the point of view of domestic prosperity but equally from the point of view of international trade and the removal of the economic rivalries which are the basis of war and international unrest.”[33] On a visit to the States in 1935, after lunch at the White House with Roosevelt, he reported that “My whole impression was of an honest anxious man faced by an impossible task – humanising capital and making it work.”[34]

        Cripps’s belief that only socialism could eliminate international commercial rivalries was widely shared within the Labour Party, which was also bitterly opposed to the form of trade regulation – imperial preference – that the National Government favoured. This opposition was seen in Cripps’s reaction to the 1932 Ottawa agreements, which confirmed, via a series of bilateral accords with Dominion countries, the system of imperial preference that Britain had introduced that February. He stated in the House of Commons that “neither Free Trade nor tariffs is going to offer any solution of the problem which this country finds itself up against so acutely at the moment,” i.e. the consequences of world slump.[35] He went on to say that “when this country becomes more sensible,” the government, rather than private firms, would control imports and exports, as was the case in the Soviet Union. Furthermore, “If these proposals were truly a step in the direction of ordered planning in trade, we might welcome these agreements as a first instalment of Socialism. Unfortunately we cannot.”[36]

In the post-WWII trade negotiations, he would prove extremely reluctant to abandon imperial preference. For this there were pressing practical reasons, but Cripps was nonetheless acting in line with this early view that such a system could perhaps, if extended in the right direction, be made consistent with the operation of a socialist economy. Yet although Cripps’s views on trade were by no means beyond the pale of mainstream Labour opinion, his extreme positions on other issues got him into trouble. As the decade drew on, in spite of his popularity with the constituency Labour parties, Cripps came increasingly into collision with, and was ultimately defeated by, Labour’s established hierarchy. In 1939, his highly personalised campaign for a “Popular Front” led to his expulsion from the Labour Party. By the time war broke out that September, he faced a politically uncertain future.

Wartime Origins of Multilateralism

While both Cripps and Clayton served their governments during the war, it was only Clayton who played a significant role in planning for the post-war trade policy. And even Clayton’s contributions came only from 1942 onwards, by which time key lines of US policy had already been laid down; and his influence was not as crucial as it would later become. Indeed, on both sides of the Atlantic it was expert officials who played the key part in delineating commercial policy for the post-war era. The positions thus arrived at remained fluid under the subsequent leadership of Cripps and Clayton, but in order to understand the role of our two protagonists in the negotiations that followed the war it is important to examine the planning processes and the Anglo-American consultations that took place during it.

        The wartime discussions that preceded the birth of the GATT led to seminal shift in US trade policy, from a bilateral approach, to a multilateral one. It is important to be aware, however, that multilateralism takes different forms.        Procedural multilateralism results from the direct involvement by three or more participants in the actual negotiation and design of the shared policy. Principled multilateralism evolves when there is sufficient consensus on principles or policies such that all parties are prepared to co-ordinate their actions, whether or not they took part in negotiating the characteristics of the joint policy. In other words, regardless of whether they sat at the table to design the multilateral agreement or institution, nations will co-operate because they agree with the principles upon which the co-operation is based.[37] American policy, as developed during the war, was to institute principled multilateralism in the post-war trading system, using procedural multilateralism as a means to establish it.

        The literature to date has focused on the fact that the Americans wanted principled multilateralism, but has overlooked this simultaneous emphasis on procedural multilateralism. Yet support for procedural multilateralism - without precedent in the history of American trade relations - ran strikingly counter to apparent American interests. A bilateral / MFN system would have accounted for the American desire for non-discrimination and better suited American economic and business aims: bilateralism was more specific, addressed concrete issues on a case-by-case basis, and would have enabled the more effective application of US power over weaker, individual trading partners. The Americans could simply have continued the trade pattern that they had already established after the inception of the RTAA. Why risk diluting that power in a multilateral forum, at a time when its dominance was greater than it had ever been?

        The answer must reflect the inclusive ideology of the planners, and the pressures to which they were subject through negotiation with Britain, America’s wartime ally. Not only did the U.S. planners seek multilateralism, they wanted a particular combination of principles and processes to be at the forefront of that multilateralism. Non-discrimination and reduced trade barriers served as the primary, political-economic principles of the proposed trade organization, and these principles were to be converted into policy through an inclusive political process. Moreover, deliberate pressure from the British played a significant role in the formation of American post-war trade policy in this regard. The Americans constantly involved the British in the planning process during the war, and permitted the British to involve the Dominions as well, and from early in the war, the British consciously pursued a strategy in which they attempted to persuade the Americans to adopt procedural multilateralism.[38]

US planning for the post-war world had started within the State Department as early as 1939, and was initially based on the assumption that future progress towards freer trade would be based on a straightforward extension of the RTAA programme. The planning process was further stimulated when, in August 1941, the British and American governments issued the Atlantic Charter, in which the two countries stated their “desire to bring about the fullest collaboration between all nations in the economic field”. The Japanese attack on Pearl Harbor on 7 December that year gave a further boost to US internationalism, in economic relations as well as in foreign policy.[39] And on 23 February 1942, Britain committed herself to Article VII of the Mutual Aid Agreement, whereby as ‘consideration’ for American Lend-Lease aid, there would be “provision for agreed action by the United States and the United Kingdom ... directed ... to the elimination of all forms of discriminatory treatment in international commerce, and the reduction of tariffs and other trade barriers.” (It would subsequently become clear that these words could be interpreted in rather different ways; the ambiguity was heightened by Roosevelt’s assurance to Churchill that Article VII did not mean the trading of imperial preference for Lend-Lease.)[40] There followed a drawn-out process of Anglo-American negotiation as to the form this consideration should take.

The British approached the negotiations with two tactical objectives in mind. Firstly, they wanted future trade deals to be carried out on a multilateral basis, as they hoped that this would help Britain form a united front with the Commonwealth countries, combating possible US attempts to play them off against one another.[41] The Americans were prepared to accede to this, as they were aware of the importance of appearing to treat each of their allies alike.[42] This would later determine the form and dynamics of the GATT negotiations. Secondly, the British were keen to take the initiative in the war-time discussions, as this would mean that they could make bold proposals whilst writing their own safeguards and ‘escape’ clauses.[43] One key official British initiative was John Maynard Keynes’s plan for an international clearing union, published in April 1943 at the same time as Harry Dexter White’s parallel US plan for an international stabilization fund and reconstruction bank. Another was the complementary plan designed by James Meade (a Keynesian economist and war-time official) for an international commercial union, designed to create a multilateral trading system, from which, Meade believed, Britain was likely to benefit. However – and here were the safeguards – both state trading and “the continuation of a moderate degree of Imperial Preference” would be permitted.[44] These proposals formed the framework of the Anglo-US Article VII discussions in which Clayton took part during the fall of 1943.

By the time these discussions began, the British and Americans had, for different reasons, reached the same conclusion: the world needed a system of multilateralism in trade that involved multilateral clearing, a multilateral negotiating mechanism for the reduction of tariffs, and multilateral inclusion in the design and operation of the system’s rules and exceptions. For the Americans, trade multilateralism fit their political views very neatly: pursuing what Charles Maier has referred to as “formal equality among participants”[45] suited the American self-conception as an inclusive democracy. The British needed access to foreign markets, an increase in the volume of trade, and therefore they, too, sought clearing on a multilateral basis, but they did not necessarily need to pursue multilateral construction of the rules of trade, nor advocate a multilateral forum with nominally equal participation for the operation of the system. They chose this path, after much internal deliberation, because they sought a solution that would empower Britain to implement rules and exceptions that favoured her interests over those of the Americans.[46] The consequences of this approach were deep and long-lasting, and despite their machinations to form alliances before and during the period when negotiations went multilateral, the British relied in the end upon the stubborn will and tactical abilities of their negotiators. In 1945 and after, Cripps would serve them well in this regard.

Cripps and Clayton, 1940 – 1945

By 1942 Cripps had staged a remarkable political comeback. Appointed as ambassador to the USSR in 1940, his efforts initially had little success, given the refusal of both the Soviets and his own government to pay him much heed. But he became the beneficiary of the immediate improvement in Anglo-Soviet relations that followed the German invasion of June 1941. Returning to Britain in January 1942, he was popularly seen as the man who had brought the Russians into the war, and was given a seat in the War Cabinet, at a time when Churchill’s own star was dimming because of major military setbacks. Cripps thus emerged as a serious rival to the Prime Minister.

But his new-found prestige was not to last. He almost immediately travelled to India on a mission to negotiate self-government for the country; but agreement failed. Back in the UK, he did not fulfil very effectively his more parochial responsibilities as Leader of the House of Commons. Against the background of declining parliamentary support, his differences with Churchill over military strategy gave the latter an excuse to demote him later in the year, once Britain’s fortunes had turned with the November victory at El Alamein.  He continued in government in the more junior role of Minister of Aircraft Production until 1945, which was also the year he rejoined the Labour Party. In 1944, the US embassy in London judged that “He has perhaps the most incisive and versatile mind of any man in British public life today, but lacks the personality and human touch necessary for a great popular leader.”[47]

Clayton, for his part, was more involved in wartime events on the domestic front. He arrived in Washington in 1940. The war in Europe had converted him from a reluctant ally of FDR into an enthusiastic supporter. Roosevelt soon appointed him deputy to Nelson A. Rockefeller, the new Co-ordinator of Inter-American Affairs. Soon after, Clayton took up a new post, as Deputy Federal Loan Administrator of the Reconstruction Finance Corporation and Vice President of the Export-Import Bank.[48] In February 1942, he was named Assistant Secretary of Commerce. Clayton’s legendary ascent in the business world complemented by his personal charm and administrative talent helped him to develop an excellent reputation in Washington.

Clayton played an active role in the 1943 Article VII discussions. He assisted Harry White in parrying the attempts of Keynes to insert what the Americans saw as unsound and inflationary provisions, giving greater leeway to debtor nations, into the design of new international financial institutions. He was also instrumental in opposing Keynes’s ‘buffer stock’ plan, which was designed to eliminate excessive fluctuations in the price of primary commodities.[49] His belief was that a ‘sound’ monetary plan was the prerequisite of world trade expansion, which, if unhampered by restrictive commodity proposals, would itself facilitate the high levels of employment that the British held dear – and this generalised prosperity would ensure world peace. In December 1944, Roosevelt appointed Clayton Assistant Secretary of State for Economic Affairs (in 1947, he was promoted to Under-Secretary). He thus took over responsibility for post-war commercial policy planning, shortly after Hull had been replaced as Secretary of State by the ineffectual Edward Stettinius.

In April 1945, Roosevelt died and Harry S. Truman became president. Soon, the new president would make two momentous decisions that forced the post-war planners into urgent action: he approved dropping the atomic bombs that precipitated the end of the war, and then he unceremoniously cancelled Lend-Lease. Shortly before these events, the British Labour Party, in July 1945, won a surprise landslide election victory.  Clement Attlee, the new Prime Minister, appointed Cripps President of the Board of Trade. The stage was now set for Cripps’s post-war trade policy battles with Clayton.

The Washington Negotiations

The planning was over; the post-war world had arrived. With the cancellation of Lend-Lease, Britain found itself in dire financial straits, and looked urgently to the US for assistance. With the World Bank and International Monetary Fund already successfully negotiated, both countries also sensed a critical need to lead the world toward the re-establishment of normal trading relations. They aimed to institute the ITO that had been planned during the war.

        Clayton was in Europe when the war ended and on his way to England. He was about to meet Cripps for the first time. The end of Lend-Lease took Clayton by surprise. He was very angry and so were the British.[50] Although he was able to secure some amelioration of the final terms, the situation remained urgent. Clayton, Cripps and other politicians and officials in London hurriedly prepared to launch formal talks on both financial aid to Britain and the structure of the post-war trading system. Clayton pressed for the commercial policy discussions to start in September, at the same time as the financial negotiations.[51] Cripps, supporting the view of Keynes, urged delay, overriding the doubts of his colleagues: it would be advantageous “to develop the financial side at some length and in detail in the expectation that as a result of this explanation the American position on commercial questions would change in some important respects from that which they had taken up to the present time.”[52] The delay caused Clayton and his team – under firm instructions from Truman to ensure that financial aid to Britain was coupled with the elimination of trade restrictions[53] - “considerable distress”.[54] Paradoxically, although the maneuver may have damaged Britain in the financial talks,[55] by allowing the trade policy negotiators additional time to prepare, it may have strengthened her in the commercial discussions. Finally, after more than six years of planning on the American side, three years on the British side, and four years of bilateral deliberation, the first formal, post-war negotiations to establish an international commercial policy regime commenced on 1 October 1945.

The financial outcome of the loan negotiations was not advantageous to the British, who had hoped at first for a grant-in-aid for $5-6 billion from the Americans, and then at least for an interest free loan, but received only an interest-bearing loan of $3.75 billion.[56] Furthermore, the loan was conditional on sterling being made convertible no later than one year after the ratification of the agreement, a condition which subsequently proved highly damaging. These facts have drawn attention from the commercial policy aspects of the negotiations, which have tended to be presented as a harmful “genuflection to American nostrums of nineteenth century liberalism in trade”.[57] It appeared that that the US had ‘purchased’ concessions on commercial policy with the loan. In fact, as will be seen, the US made major concessions to UK demands.

Although Cripps was not physically present in Washington, the Cripps-Clayton relationship, conducted at this point at arms-length, was nevertheless critical to the outcome. Together with Ernest Bevin (Foreign Secretary) and Hugh Dalton (Chancellor of the Exchequer), Cripps was part of the committee of three which bore responsibility for the negotiations at the London end, and which eventually persuaded a reluctant cabinet to accept the deal.[58] Naturally, he took chief responsibility for the commercial aspects. It was Cripps whom Clayton later blamed for Britain’s failure to implement the agreement that he, Clayton, believed had been reached.[59] This resentment was not due to insufficient attention to the diplomatic niceties on Cripps’s part. In addition to haggling with Clayton, via intermediaries, over the precise wording of the final Anglo-American joint statement on commercial policy,[60] he appreciated the necessity of establishing warm personal relations. In mid-October, he provided the British negotiators with a message expressing “my deep appreciations of the friendly and understanding spirit” in which the Americans were carrying out the commercial talks, to be conveyed “to Mr. Clayton at any time when you think it would be of assistance to your negotiations to do so.”[61]

Cripps stressed in September that “provided that our position is safeguarded in certain important respects, a multilateral commercial convention, if one can be obtained, may be very much in our interest. The vital objective of a 50 per cent expansion of our exports is not likely to be reached in a world in which the markets of other countries are hedged about by arbitrary and unregulated barriers to trade” (emphasis in original).[62] And he had earlier made clear the reason that the British sought a multilateral approach to the commercial policy negotiations: “We and the Dominions should not be dealt with one at a time and squeezed on preference reductions.”[63] The British clearly perceived that they would benefit from procedural multilateralism; and in due course they managed a subtle but crucial victory by demanding that any commitments they made on commercial policy would be subject to Commonwealth consent.[64] Nevertheless, Cripps at the same time expressed misgivings about procedural multilateralism in practical terms; he “felt considerable doubt as to whether such a large number of simultaneous negotiations [as were envisaged] could produce any satisfactory result, and whether detailed negotiations on tariffs and preferences could be completed for signature at the same time as the general provisions of any agreement.”[65]

Throughout the Washington negotiations, Clayton and his team demonstrated some behavioural patterns damaging to their aims. They showed a notable tendency to bluster and then retreat. One example illustrates the point particularly well: “The Americans mustered all their resources in an attempt to demonstrate the particular iniquity of export taxes… In the end Clayton summed up by saying that he thought that he agreed with much that had been said on both sides and suggested that a further attempt should be made to reach agreement at the expert level.”[66] The official State Department study subsequently reported: “The British position on export taxes was accepted by the United States.”[67] Clayton had learned to master his temper to an almost obsessive degree, but occasionally his attacks were too dogmatic and vociferous; then, later, he had a tendency to conciliate more than might have been necessary had he not gone over the top in the first place. After an impassioned attack, he sometimes surrendered the American position without waiting to wrest a better offer from the British. In at least two instances, the British would have offered further concessions if the Americans had not so readily accepted their position.[68] Yet it was also the case that, paradoxically, American strength gave Clayton the ability to act generously in a fashion impossible for the weakened British. As Lionel Robbins, a key member of the British trade team, noted when on the boat to America: “How I envied Will Clayton the other evening in London when, after listening patiently to [Sir Percivale] Liesching [Second Secretary, Board of Trade] on a certain point, he threw his papers on the table and said, ‘I won’t argue with you, Sir Percivale, I have always said we have been wrong on this point and I believe we are still.’ That was the sort of thing we could afford to do when we still had confidence in ourselves”.[69]

The British exploited this generosity to the best of their ability, but also knew when to stop short. On the question of cartels – which were anathema to Clayton and the Americans - UK negotiators gained ground more rapidly than they had initially thought possible. The British negotiators in Washington were so surprised by their sudden success that they refused a request from Cripps to push the Americans more – on the astonishing grounds that they were worried that further success on their part might damage the ITO’s prospects for passage through the American Congress.[70] Similarly, on the question of state trading, the British delegation happily cabled home: “On this subject too the Americans have accepted completely our point of view.”[71]

It was the question of imperial preference, however, that sparked the strongest emotional reactions on both sides of the Atlantic. For Clayton and the State Department negotiators, preferences represented the most dangerous political manifestation of trade barriers – discrimination. Non-discrimination was the core element of their principled multilateralism.[72] The State Department had sought a British commitment to abolish preferences since their first bilateral encounter, in August 1941. The Americans stressed during the Mutual Aid and Article VII deliberations that the British should agree to scrap preferences simply as a matter of principle.

Clayton, the British noted, was “a leading exponent of the more extreme form of the American demand” for surrender of preferences, yet also “an upright and honourable man”; so there were grounds for hope.[73] The British maintained a stubborn defence. Cripps had argued in London, before the formal negotiations started, “that tariffs and preferences should be dealt with side by side: any attempt to separate preferences for treatment as a matter of doctrine would raise grave difficulties.”[74] In Washington, the British argued emphatically that, given Britain’s economic weakness and the state of her domestic opinion, they could neither afford to eliminate preferences outright, nor could they be seen to do so in exchange for American financial aid, but could only trade them away in exchange for major reductions in US tariffs.[75]

        An internal State Department assessment of the talks stated: “The section on tariff preferences finally agreed upon was a substantial victory for the American delegation ... the final language agreed upon still provided for the elimination of tariff preferences, but went out of its way to sugar-coat the pill.”[76]  Yet this final language in fact veered far from the simple original American proposal, which stated: “Members should undertake to take effective and expeditious measures, in accordance with methods to be agreed upon, for the substantial reduction of tariffs and the elimination of tariff preferences.”[77] The changed draft made clear, as Secretary of State James Byrnes noted, that “we are not asking the British to give us a unilateral commitment on preferences in consideration for financial aid and apart from what may be done on tariffs and trade barriers generally”:[78]

In the light of the principles set forth in Article VII of the mutual aid agreements, members should enter into arrangements for the substantial reduction of tariffs and for the elimination of tariff preferences, action for the elimination of preferences being taken in conjunction with adequate measures for the substantial reduction of barriers to world trade, as part of the mutually advantageous arrangements contemplated in this document.[79]

However, Cripps recognized that the ‘mutually advantageous’ formula was to some extent ambiguous: “Though the actual content of the American formula may provide us upon one interpretation with the safeguards that we regard as essential I am most fearful lest in the explanation of this formula in the two countries two widely different interpretations emerge.” As he saw it, the only way to safeguard against future American accusations of bad faith was for both sides to agree an explanation, supporting the British interpretation, to be made by the UK government in parliament.[80] Accordingly, a statement was made in the House of Commons by Attlee on 6 December 1945, and the wording was seen by the State Department beforehand:[81] “We for our part are ready  to agree that the existing system of preferences within the British Commonwealth and the Empire will be contracted provided there is adequate compensation in the form of improvement in trading conditions between Commonwealth and Empire countries and the rest of the world ... reduction or elimination of preferences can only be considered in relation to and in return for reductions of tariffs and other barriers to world trade in general”.[82]

The Americans, however, were extremely displeased by this statement, and drew up one of their own, which the British agreed could be made by the US if the necessity arose. This provided that if the Dominions were to adopt an unreasonable position regarding the elimination of preferences, the UK would denounce its agreements with the Dominions.[83] In fact, the Americans never called on the British to do this, and so Attlee’s statement remained the public position. Overall, then, the British appeared to have won a clear victory – even if the State Department did not see it that way. Cripps told the cabinet: “so far as the commercial policy proposals were concerned, our negotiators had obtained satisfaction on all the points which they had raised.”[84] (He was thus a firm supporter of the loan agreement in its final form.)[85] In selling the agreement to parliament, he stressed that imperial preference would not be abolished by diktat, but could only be negotiated away freely in return for concessions by others. Matching his internationalist rhetoric with profound pragmatism, he argued: “If any one party is invited by another to reduce a preference, he is at liberty to say, ‘I cannot do it unless you reduce your tariffs by 100 per cent.’”[86] The Americans, however, would be unlikely view such tactics kindly: the two sides had very different ideas about the size of the offers the British would have to make in order to meet their promise to negotiate in good faith.

Moreover, it subsequently became clear that Clayton was at odds with his own subordinates on the question of how the agreement was to be interpreted. Clair Wilcox (Director of the State Department’s Office of International Trade Policy) and Harry Hawkins (Economic Counsellor at the US embassy in London) laid stress on the ‘mutually advantageous’ provision; that is to say, that the British would only have to eliminate preferences if a good all-round settlement was reached, rather than merely, as Clayton suggested, in exchange for the direct tariff concessions to be made by the US. In private discussion in May 1947,

Mr. Clayton emphasized the basic bilateral nature of the financial agreement, while Mr. Wilcox and Mr. Hawkins attempted to show that the negotiators had accepted at the time the necessity of achieving a multilateral and mutually satisfactory agreement. Mr. Clayton said that if he had interpreted the commercial policy commitment of the British as did Mr. Wilcox and Mr. Hawkins, he would never have signed the agreement ...[87]

As his daughter recorded in her biography of him, Clayton “believed that the British had agreed, in return for United States assistance, to abandon the imperial preference system.” He was enraged when he found that Cripps (and indeed his own advisers) saw things differently – and would be ready to scrap the agreement so recently negotiated.[88] Cripps was thus unable, in spite of his attempt to ensure clarity, to avoid the accusations of bad faith that he had feared.

The concession made on preferences in 1945 is most striking among the various US compromises to meet British demands. The reasons for it still confound analysts of the period. Indeed, it played a major role in precipitating broad theoretical explanations, such as those proffered by hegemonic stability theorists and regime theorists.[89] Yet part of the explanation seems to lie in Clayton’s apparent misunderstanding of what had been agreed, the reasons for which may be rather prosaic. On 25 November, Clayton, “who has been seedy for some time”, developed a fever, apparently caused by a foot infection, and had to retire from some of the final stages of the discussions.[90] It may well be that had he not been ill, he would have been more alert to the subtleties of what the British were proposing, or perhaps less willing to agree to a compromise that he was unwilling, later, to believe that he had ever made.

Geneva and Havana

Clayton’s misunderstanding can also, however, be explained to some degree by wishful thinking on his part; having been out-maneuvered by the British on the trade issue, he put the most generous interpretation possible on the agreement in order to get it past Congress, and convinced himself of his own success into the bargain.[91] As has been seen, disillusion set in during the Geneva negotiations of April - October 1947. This conference followed an earlier preparatory session in London in October 1946, at which neither Cripps nor Clayton was present.[92] The Geneva talks not only aimed to reach preliminary agreement on a charter for the proposed ITO (this was achieved in August),[93] but also involved the first multilateral bartering process, whereby the fifteen countries present swapped concessions on tariffs and preferences.

 At the outset, Cripps and Clayton still maintained cordial relations. Cripps told Ernest Bevin, the British Foreign Secretary, of his own reasons for attending the opening session: “One of my purposes in going is to make it clear by speaking myself in plenary session that the Government are whole-heartedly behind this attempt to rectify the economic troubles of the world and I have been much disappointed to hear that Mr. Clayton, whose name has been announced in the United States as Chairman of their Delegation, is not likely himself to attend the opening.”[94] Clayton at this point, was still convinced of British good faith, told Senators: “The British ... depend on international trade more than we do, and I think, as far as the objective is concerned, they are more enthusiastic in this than we are.”[95]And although the discussions moved slowly early on, in June Clayton defended, to a degree, a speech by Cripps which, according to Wilcox, bitterly criticized the US and disparaged the importance of the trade negotiations and the ITO: “Cripps is certainly right in saying that neither tariff negotiations nor ITO could result in additional half-billion dollars monthly imports into United States in time to take care present Europe dollar shortage.”[96] And Cripps continued to  assure him that “there was no question of our support for the ITO Conference being half-hearted”.[97] Yet the talks descended into suspicion and recrimination.

Some months later, Harold Wilson remarked in private that “Stafford had begun by being all out for the American policy, but as the extent of America’s real willingness to make real contributions revealed itself day by day as something smaller and smaller, Stafford had changed.”[98] (A key episode in this decline in confidence is likely to have been Congress’s action in passing a protectionist Wool Bill, thus almost derailing the talks, which were saved by Truman’s June 26 veto of the bill, as urged by Clayton.)[99] Yet Britain’s own weakening balance of payments position played an equally important part in Cripps’s growing doubts. On 23 June 1947 Cripps briefed the editor of the London Times that Britain’s dollars were running out fast and might be gone by November. Moreover, he thought that Clayton was too wedded to the ITO, “but perhaps [was] less obsessed by ‘non-discrimination’ than he had been previously.”[100] (Indeed, Clayton soon agreed that Britain should be granted an additional breathing space before having to implement the GATT’s non-discrimination provisions.)[101] Even the announcement on 5 June of the Marshall Plan – which Clayton had played an important role in stimulating – had not been enough to solve Britain’s problems. The implementation of sterling convertibility on 15 July – obligatory under the loan agreement - led to a chronic dollar drain, and on 20 August convertibility was suspended. Clayton was “visibly shaken” when he heard the news.[102] He doubtless appreciated the likely consequences for his vision of multilateral trade. Three days later, Wilson, the British junior trade minister, warned the Geneva conference that in the coming months and years, Britain would have to use methods which “may appear to be opposed to the principles and methods of the draft [ITO] charter”.[103]

Moreover, Clayton had concluded early on that Britain’s offers in the tariff talks were “inconsequential”. In July, even whilst now conceding that the US would not demand elimination of all Empire preferences, he told Cripps so: “they amounted to nothing more than token offers”. Cripps coolly responded that, if the Americans were dissatisfied, they should withdraw some of their own offers in order to achieve a balance.[104] The talks dragged on, and tempers were doubtless not improved by the fact that the Palais des Nations lacked air-conditioning, and on summer afternoons became stiflingly hot.[105] However, it was a facet of Clayton’s personality that “When he got mad ... he got more and more polite, almost icily polite, and got even more so – more polite – when really mad.”[106] This may have disguised from Cripps the depths of his feelings, and encouraged the British to continue holding out. At the end of August, Clayton cabled Washington that Cripps’s attitude bordered on “callous disregard” for the British commitment on preferences.[107] In mid-September, the Americans attempted to break the deadlock by remonstration and threats – although Clayton did not show his anger in person. Instead, Clair Wilcox gave a “crackerjack” speech to the Commonwealth delegates, lambasting Cripps: “This approach of gradual action [to reduce and eliminate preferences] was first suggested to us by Sir Stafford Cripps and was then rejected by him for reasons that we do not know.”[108] The Americans threatened force majeure. They argued that the percentage of preferences covered by the UK offers was inadequate when measured against the percentage of US tariffs on which reductions had been offered to Britain: if Britain could do nothing better “they would have no alternative but to recommend suspending negotiations.”[109]

On 19 September, Clayton and Lew Douglas, the US ambassador to Britain, met with Cripps. Cripps disputed the statistical basis used by Clayton in support of his case and his interpretation of the obligations Britain had agreed to in Washington in 1945. Cripps “said that it was his opinion that we were now being called upon to give up far more than we stood to gain and that while he would of course put Mr Clayton’s latest proposals to his colleagues he would not feel able to recommend that we should go any further to meet the USA in this matter.”[110] Feeling that “the whole matter was so serious” and fraught with danger, Clayton and Douglas sought a further meeting with Bevin as well as Cripps.[111] This took place on 21 September. Clayton “emphasised strongly that unless we were prepared to go further the Americans would look upon it as a repudiation of one of the important conditions of the Loan. For such a repudiation there was no excuse…” As regards the decision to be taken he said, “I shall recommend Mr Marshall not to accept your offer but whether he does or not the American public will regard it as a repudiation and I could not put it forward to Congress in any other light.”[112] He thus crossed the thin line between remonstration and accusation. Clayton referred only casually to the effect of a break on this issue upon the prospects for Britain getting Marshall Aid, but Douglas made the connection explicit. Bevin’s private secretary thus noted in his diary: “A busy day in the Office, with Clayton and Douglas next door trying to blackmail E.B. and Cripps into dropping imperial preference under threat of no help for Britain under the Marshall Plan.”[113]

But, to Clayton’s “bitter disappointment”, Cripps refused to back down.[114] Norman Robertson, the Canadian High Commissioner in the UK, travelled on the same ship as the Americans as they returned home. He “had no word with Clayton on the boat as Douglas had advised him that Clayton was too sore to be approachable ... He did, however, have several long talks with Douglas, who was deeply concerned and out to pour oil on troubled waters but was evidently anxious as to his ability to do so, in view of Clayton’s frame of mind.” Yet, as Robertson pointed out, the “fact was Clayton had to be won over somehow if programme was to be got through. Politically it would be impossible for the administration to override him, he had been associated with the scheme throughout, and he was their chief spokesman to Congress over the whole of this field.”[115]

The episode threatened a severe rupture between Britain and America; yet, in the end, a compromise was reached. The British agreed to a 25% reduction in colonial preference margins, in exchange for a US concession over rubber mixing regulations. Cripps (who had just been appointed Minister of Economic Affairs), Harold Wilson (who replaced him at the Board of Trade), and Bevin recommended the solution to Attlee “in view of the serious repercussions which a breakdown in the negotiations would have on Anglo-United States relations.”[116] But why did Clayton accept a compromise that came nowhere near to meeting his expressed aim of “cracking imperial preference”?[117] Zeiler has written that, in reaching agreement, the Americans “willingly allowed trade partners to protect their markets as part of a national security agenda to prosecute the Cold War.”[118] It is of course true that the fear that a public rift would hand a propaganda victory to the USSR did provide a clear motive for the patching-up of Anglo-American differences. Yet it was also true that the multilateral forum of the trade negotiations had generated trade gains for the USA from third parties that would have been jeopardised by a bilateral rupture with Britain. This, rather than the cold war, seems to have been decisive. As Winthrop G. Brown, chief of the State Department’s commercial policy division at this time, recalled:

Mr. Clayton wanted to get total elimination of all preferences. We civil servants knew it wouldn’t be possible to do that. Mr. Clayton at one time really thought that Sir Stafford Cripps had agreed with that and there was a terrible misunderstanding. He was very hard to convince that we had to go ahead even without that total elimination having been agreed. So, we came to this impasse. At that point the boys came in with the total results of the tariff negotiations and each side found that so much had been accomplished that it could not be lost. This total accomplishment just had to be saved somehow.[119]

According to Clayton’s daughter, it was only the pleas of Brown and Hawkins that prevented him from throwing overboard all the fruits of his previous efforts.[120] Once he had agreed, formal Anglo-American concord was reached fairly quickly – although not without further hiccups - and on 30 October the signing of the GATT followed. Thus, paradoxically, the adoption of procedural multilateralism had generated trade gains for the US, even whilst undermining its ability to impose its will on one individual partner. Nevertheless, the episode marked a fatal collapse in confidence between Cripps and Clayton. Clayton continued to believe that the British had gone back on their word; Cripps was almost pathologically averse to imputations of dishonesty,[121] and it is doubtful that he ever forgave Clayton for the slur.

The consequences went beyond the personal, however.  At the Havana conference (November 1947 – March 1948) which negotiated the final form of the ITO charter, Clayton worked against, rather than with, Cripps’s British team. Clayton had resigned from the State Department in October 1947, even before agreement at Geneva was concluded (largely because of pressure from his wife) but agreed nonetheless to serve as head of the US delegation.[122] Cripps was promoted to Chancellor of the Exchequer in November, and reached the height of his domestic prestige, even as his credit with the Americans ebbed away. He did not go to Havana himself, but kept a firm hand on the talks from London. Clayton, however, outmaneuvered the British by offering concessions to developing countries on quantitative restrictions, commodity agreements, and regional preferential arrangements in order to win their agreement to the Charter. Britain believed many of these concessions would be damaging to her own interests.[123] With Cripps and other ministers overriding the more cautious Harold Wilson, the British sought from the Americans yet another breathing space in which UK would be free to discriminate; but this came to nothing.[124] Increasingly isolated in the negotiations, they were finally forced into agreement. On 27 February 1948, Clair Wilcox, Clayton’s deputy, advised him:

If the conference is adjourned, Cripps threatens UK will not “sign the Charter”. ...

You will recall that Cripps threatened to walk out on the Geneva negotiations last summer unless we would give British complete freedom to discriminate for a year. We capitulated. Subsequently he refused flatly to carry out the commitment of his government to negotiate in good faith for the elimination of preferences. We capitulated again. Now he is employing the same tactics. But the situation is radically different. Everything is out in the open. He cannot get his way in secret. He is completely isolated – from the rest of the Commonwealth, from the countries of Europe, from the undeveloped countries of the world. We do not have to give him anything. The UK will not move to adjourn the conference. It will sign the final act.[125]

Clayton stood firm and Wilcox’s prediction was vindicated.[126] This was Clayton’s “rabbit out of the hat”;[127] but the concessions that had accumulated since the Washington Negotiations in 1945 (together, perhaps, with Britain’s apparently reluctant attitude to the charter), in turn made it unpalatable to Congress. The Truman administration delayed seeking its ratification until 1950. In December of that year, with its attention distracted by the Korean War, the administration finally announced it would not pursue the plan further. Clayton’s absence from government may have been critical. As John M. Leddy, a US participant in the Geneva and Havana talks recalled: “I think if Will had been the Under Secretary for Economic Affairs in those years he would have gotten it done. This could be just the difference. [Dean] Acheson was ready to send it up, and go and speak to it, and all that, but not with the [necessary] kind of drive and conviction.”[128] So the ITO failed. Yet the flexible, heterodox, and “provisional” GATT survived, and long outlived both Clayton and Cripps.

Conclusion

Cripps led the British attempt successfully to synthesize two conflicting strands in their own negotiating position. They combined a plea for mercy on grounds of war devastation, with an unyielding demand for equal respect at the conference table. These tactics served them well in the Washington negotiations and the multilateral conferences that followed. They could not rely on ‘hard’ diplomacy to support their stance, and yet every time the Americans protested a particular position, Cripps held firm and obstinately refused to budge. Of course, Clayton helped by relenting, often when the British were nearly ready to capitulate. Nonetheless, simple diplomatic resistance played an important role. Without the traditional tools of ‘hard’ diplomacy – military, political and economic power and prestige – Cripps and his negotiators resisted American demands with a combination of lucid arguments (presented to a receptive audience), pragmatism (versus American idealism), bluff (in the face of American openness), tenacity (aided by American flexibility), and the shrewdness to press for the transformation of a bilateral negotiation into a multilateral forum where Britain and its Commonwealth allies outnumbered the US by a factor of five to one.

Thus Clayton and other supporters of US multilateralism conjured an inclusive forum that empowered popular, foreign demands for the watering-down of non-discrimination rules, and thereby undermined the economic policies they believed were ultimately ‘right’ for the world. Forced to choose between liberal political and economic principles during the negotiations, Clayton generally chose the former. Many analysts have argued, of course, that other American officials throughout the twentieth century pursued the opposite priority.[129] In light of these arguments, the significance of Clayton’s personal predilections – and those of Cripps, his opposite number - looms larger.

Cripps in effect faced Clayton down. He convinced his colleagues repeatedly that, with periodic delays and the right tactics, he could secure more concessions from Clayton’s negotiating team. He thereby succeeded, time and again, in doing so. He succeeded in converting his country’s economic weakness into negotiating strength. However, this ploy could only work so long. By the end of the Havana conference, Clayton and his team were prepared to call Cripps’s bluff. The irony was that they could only do this by making concessions to other countries which in due course proved unacceptable to US domestic opinion.

As we have suggested, Cripps’s and Clayton’s roles in, respectively, resisting the imposition of United States wishes on trade policy, and failing to push home American advantages to the full, owed much to their personal preferences. Moreover, when the dynamics of the negotiations moved from the Anglo-American bilateral realm in 1945 into the procedurally multilateral realm in 1946-8, further forces of resistance and accommodation were unleashed – to the degree that the common description of the US in this period as a ‘hegemon’ seems inappropriate in this instance. [130]

In broad terms, the birth and survival of the GATT came about because of America’s principled commitment to procedural multilateralism, combined with a British determination to exploit that commitment to obtain concessions. The precise nature of these concessions, however, was only determined by the interactions of the negotiators themselves. Within certain broad constraints, this fact meant that their own personal temperaments, ideological predilections, and negotiating strategies became very important in arriving at outcomes. Hence, in this particular  instance (the negotiations at Washington, Geneva and Havana) small character traits and personal circumstances –Cripps’s stubbornly legalistic attitude, Clayton’s inability to show his anger, even the latter’s minor illness in 1945 – seem to have had a disproportionate influence on international events at critical moments. These traits and circumstances played an important part not only in determining the form of the GATT, but also in ensuring that it was not superseded by the ITO.

Indeed, systemic theorists have traditionally under-estimated the role that figures like Cripps and Clayton played in establishing a durable trade regime. As has been demonstrated, the British, under the leadership of Cripps, played a significant role in resisting Clayton’s attempts at American hegemonic imposition. Hegemonic stability theory has conspicuously failed to account for the significance of resistance strategies in the formation and durability of stable regimes. As Charles Maier has argued, “[h]egemony imposed on a zero-sum cockpit, that is, at the expense of the secondary members of the system, must finally prove less durable.”[131] The multilateral trading system has not survived until today merely because a hegemonic power has insisted upon it.

        Although Clayton had wholehearted admirers in Britain, most British officials and politicians tended to see Clayton as likeable, but doctrinaire and ‘woolly-minded’. “He is not only deeply imbued with business analogies but suffers in my opinion, obstinately and beyond cure, from honest intellectual misapprehensions”, wrote Keynes in 1945. “He is an honest and most friendly man, but his very honesty makes intellectual mistakes on his part all the more dangerous.”[132] Cripps too drew some admiration in the other camp, but was, in spite of initial goodwill, eventually seen by the Americans as petulant and arrogant; a man who not only “knows that all his ideas are correct and all his thoughts are just” as Clair Wilcox put it, but who also went back on his promises on a serial basis.[133] These perceptions, of course, were in some respects unfair. Clayton was not completely doctrinaire, taking care to stress that he “was not in favour of free trade at the present time ... but he was in favour of freer trade”; nor was his failure to accept the British point of view at all times necessarily a sign of intellectual incapacity.[134] Cripps, for his part, never acted in bad faith, although his far-sighted attempt to prevent the accusation of it failed. He was, in fact, the “main advocate of the ITO policy” in the British government;[135] yet he had great difficulty reconciling this genuine faith in multilateral trade with his equally fervent faith in state regulation and domestic planning at a time when the British economy was under dire and repeated strain.

Of course, the fact that these perceptions arose reflected wider UK-US tensions going far beyond the realm of individual personality. Nonetheless, Cripps and Clayton personally played key roles in moulding the very forces that gave rise to these tensions: their relationship was not merely a microcosm of the Anglo-American one; in crucial respects, they also helped shape the broader dynamic. The post-war trade order owed much to their conflicts and misunderstandings, and to the way in which they as individuals interpreted the interests and ideologies of the powers they represented.