ECONOMIC

constraints. Restrictions on entry into market areas, limitations on the typeof goods carried, and mandated "gateways"—creating required routes whichmay be so circular as to be bizarre—have resulted in an industry burdenedwith regulatory inefficiency. Partially loaded trucks, often required to returnempty even when alternative cargoes are available, are common. Such inefficiencyis a result of regulatory policy. There are no technologicalreasons why the motor freight industry could not operate as an essentiallycompetitive sector of the economy.A comprehensive analysis of the trucking industry is now under way andwill provide a basis for the design of a comprehensive set of regulatory reformproposals to be completed by the fall of 1974.EFFICIENT INTERNATIONAL EXCHANGEEconomic growth is significantly enhanced by an openness to foreigneconomies which permits a relatively free international exchange of goodsand capital based on economic incentive. International trade makes goodsavailable that might otherwise be lacking, or only available at much highercosts. It can also make available to domestic producers ideas about new products,new product designs, or new methods of production. For producers itcan be an added incentive to adopt more efficient methods of production.We have been reminded in recent months that in some circumstancesthere can be a danger, both political and economic, in excessive dependenceon foreign supplies. The United States must guard itself against this danger,by unilateral or multilateral action. However, if this objective is realisticallydefined it will be found not to limit greatly the scope for beneficial expansionof international trade.Despite a fairly extensive removal of trade barriers in the past 25 years,substantial barriers to international trade and investment remain in effect.The inefficient location of productive facilities because of these barriersconstitutes a loss of economic welfare to the country as a whole. Efforts tonegotiate a reduction of the remaining trade barriers are therefore importanttoward improving the efficiency of the U.S. economy. The trade legislationnow before Congress would give the President authority to negotiate a substantialreduction of such barriers.Negotiations in the trade area also have to deal with the economic interdependencethat results from trade. Abrupt economic shifts emanating fromabroad can from time to time create a temporary economic dislocation athome which needs to be moderated or offset by government measures. Sincesuch measures will have further repercussions abroad, governments need toagree on some basic rules and procedures that they can follow when theirinterests conflict. Multilateral negotiations are designed to improve some ofthe current rules and procedures, as well as to reduce existing trade barriers.An international monetary system is a prerequisite for the efficient exchangeof goods and capital. Without such a system, international exchangeis confined to barter. To function efficiently, the international monetary sys-42