THE SIGNIFICANCE OF THE IMPORTANT SUPPLIER PRINCIPLE AS APPLIED IN THE NEGOTIATION OF RECIPROCAL TRADE AGREEMENT CONCESSIONS*

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BY 1934, THE YEAR the Trade Agreements Act was passed, the value and quantum of world trade had declined to a fraction of what it had been in the previous decade. The Trade Agreements Program was a New Deal emergency measure designed to expand foreign outlets for American goods. It was one of the devices adopted by the Roosevelt administration to ameliorate depressed domestic economic conditions. American foreign commercial policy, since 1923, had been founded on the principle of equality of treatment. It was evident from the outset that some method had to be devised whereby concessions were made only to those countries who would grant concessions in return which would be of maximum benefit to American producers and consumers. It was necessary, however, to effect a reconciliation between this objective and the principle of equality of treatment. This was accomplished by the adoption of the important supplier principle. Through the application of this principle, concessions were to be granted only to countries which were the major or an important source of imports to the United States. Chapters 1 and 2 of the dissertation are devoted to the presentation of sufficient historical background material to place the study in accurate focus. Chapter 3 presents the results of an inductive analysis of Schedule II of eight selected trade agreements. The conclusions reached are that the important supplier principle provides most of the implementation necessary to make the principle of equality of treatment the most effective vehicle for attaining the objectives of the Trade Agreements Program. Chapter 4 presents an attempt to estimate the potential importance of the Trade Agreements Program in the postwar settlement. The study provides evidence to substantiate the assertion that the success of the Trade Agreements Program in achieving its announced objective is not open to serious criticism. This does not justify the