Crisis in U.S. Trade Policy

Abstract

SINCE 1962, U.S. trade policy has been moving steadily away from the liberal trade approach which had charac terized it since 1934 and which has been the objective of every administration since that time. In 1962, the Trade Expansion Act passed the Congress with the largest majority in the history of the trade agreements pro gram and led to the Kennedy Round of trade negotiations. Since 1962, however, the number of U.S. industrial imports subject to quantitative restrictions, including by for eign suppliers, has risen from seven to 67?a number which will shortly exceed the total of any other industrialized country, and whose restrictive impact is undoubtedly greater than the lib eralizing effect of our tariff cuts in the Kennedy Round. And Chairman Wilbur Mills of the Ways and Means Committee? who helped pilot the 1962 law to its overwhelming passage? commented last year that the Trade Expansion Act would have been unlikely to attract 50 votes on the House floor in 1970. The shift has come along an accelerating trend line. In 1964, Congress passed the Meat Import Act?the first legislated import restrictions for a major industry in the postwar period. There were attempts in 1964 and 1965 to negotiate voluntary restraint agreements covering U.S. imports of woolen textiles. The modest trade bill submitted by the Johnson Administration in 1968, whose only significant liberalizing feature was its request for repeal of the American Selling Price system of cus toms valuation (ASP), was never even reported out of the Ways and Means Committee ; and the Administration decided that it had to negotiate voluntary restraint agreements on steel and meat to avoid turning the bill into widespread protectionist legislation. And the Nixon Administration sought to negotiate voluntary restraints on synthetic and woolen textiles throughout 1969 and 1970. The most dramatic evidence of the shift in Congressional and public opinion developed in 1970. The so-called Mills bill, which would have levied quotas on all textile and shoe imports and tariff quotas on two minor products, passed the House of Representatives by a vote of 215 to 165. It would also have