Trade Agreements Program Research Articles

America and Trade Liberalization: The Limits of Institutional Reform

AbstractAmong scholars, delegation of power to the US president in 1934 is widely believed to have been a necessary requisite for tariff reductions in ensuing years. According to conventional wisdom, delegation to the president sheltered Congress from constituent pressure thereby facilitating the opening of the US economy and the emergence of the United States as a world power. This article suggests a revision to our understanding of just how that occurred. Through a close study of the US tariff schedule between 1928 and 1964, focusing on highly protected products, we examine which products were subject to liberalization and at what time. After 1934, delegation led to a change in trade policy, not because Congress gave up their constitutional prerogative in this domain but because presidents were able to target the potential economic dislocation that derives from import competition to avoid the creation of a congressional majority willing to halt the trade agreements program.

The Genesis of a New Industrial Policy: Equity and Efficiency

In the post-World War II period the U.S. economy has become increasingly internationalized. As an apparent empirical refutation of Werner Sombart's law of declining trade, the U.S. economy has exhibited a dramatic increase of the T/Y (Trade over Income) ratio from a figure of 9 percent in 1950 to one of 26 percent in 1980. Unfortunately, while the United States has become more immersed in the global economy, the country's capacity to compete has evidently diminished. U.S. commercial policy, from the Reciprocal Trade Agreements Program of the 1930s, on to the General Agreement on Tariffs and Trade (GATT), and our support of European integration and policies toward post-war Japan have all nurtured an increasingly competi

Crisis in U. S. trade policy

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

Crisis in U.S. Trade Policy

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

The Anglo-American Trade Agreement and Cordell Hull's Search for Peace 1936-1938

BY the middle of the 1930s, policymakers in the United States had become deeply concerned about the possibility of war in Europe and Asia. President Franklin D. Roosevelt eagerly began to seek ways to prevent a major conflict or, at least, to insulate the Western Hemisphere against its direct effects. In 1936, he called the Buenos Aires Conference in an attempt to create a system of collective neutrality. In 1937, he toyed with the idea of quarantining aggressor nations and, until 1938, mulled over the suggestion that he sponsor an international conference. While Roosevelt fitfully explored these avenues without notable success, Secretary of State Cordell Hull also sought a foreign policy initiative that would help to pull the world back from the Niagara of Hull had long insisted as a general proposition that economic rivalry was a basic cause of war and that gradual international adherence to the principles of liberalized trade embodied in the Reciprocal Trade Agreements Program of 1934 would ultimately produce prosperity and peace.' By 1936, however, Hull began to suspect that long-range remedies were inadequate; and he launched a vigorous effort to forge an Anglo-American commercial alliance that would accelerate the movement toward freer trade and thus slow the drift toward war. This endeavor culminated in the Anglo-American trade agreement of 1938, and for Hull it seemed to provide a workable plan by which the United States could effectively exert a pacific influence on the course of world events. Hull conceived of the Anglo-American agreement as the beginning of a worldwide campaign to restore political stability. Mutual adoption of liber-

Codification of Executive Orders on the Organization and Administration of the Trade Agreements Program in the United States

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Surplus Export Policy and Domestic Farm Policy

IN THE last three years we have seen a gradual recovery of United States agricultural exports from the post Korean War drop. The current volume of exports is at about the same level as prevailed in the boom years of the late 20's and in the post World War II period. When the historical trend is calculated at constant prices, the 1956 level of farm exports was at a postwar peak and was surpassed in the last thirty years only slightly by 1927. In respect to the recent upturn in agricultural exports, it seems fair to say that there is little likelihood that we will be able to maintain this increased volume of exports over any extended period of time. This judgment is supported by the fact that 41 percent of our farm exports last year went out under foreign loans, grants to foreign governments, special barter deals for strategic materials, and sales for foreign currency. While our total agricultural exports have increased almost 20 percent since 1954, bonafide sales in the open market abroad declined by about 6 percent.1 To put it another way, our agricultural export market is expanding at a slightly lower rate than the rate of increase in Congressional appropriations to pay for exports. Aside from the long-standing reciprocal trade agreements program, our current agricultural trade policy finds expression primarily in the Agricultural Trade and Development Act of 1954. This act authorizes sales for foreign currencies, barter transactions, grants for emergency foreign relief, and donations to private charities for the needy overseas. Sales for foreign currencies have accounted for a major part of the exports under this program. The one remaining new look in our export policy is found in a competitive pricing and export subsidy plan which has been in operation about a year. This is an attempt to hurdle the price gap between the domestic and export markets on price supported products. This gap ranges from as low as 9 percent for some seed crops to around 40 percent of the price for nonfat dry milk solids. To close or narrow this gap the Commodity Credit Corporation sells surplus stocks to exporters at competitive prices or export subsidies are paid to them. Last year C.C.C. released for sale to exporters nearly one billion dollars' worth of surplus products (mostly wheat and cotton) at world prices. This amounted to 28 percent of our total agricultural exports in 1956. The proponents of this plan can

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

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

The Outlook for Free Trade

THE AVERAGE AMERICAN of today probably knows less about foreign trade than did his more literate ancestors. Whether or not the Congress, by protective tariffs, should restrict our freedom to buy foreign goods was, for many generations, a question of general interest. However, for some years, both our major political parties have agreed that import duties should be levied at rates which would equalize the costs of production at home and abroad. By agreeing on this idiotic and unworkable formula, the tariff question has been taken out of politics and the voters have concentrated on the current trivia. With important issues removed from political controversy, the voters have considered such questions as the significance of Al Smith's brown derby, Wendell Willkie's Indiana accent, and the youth and stature of Governor Dewey. Serious thinking about the tariff is also hampered by our ignorance of the prevailing rates of import duties. Now that many of the rates fixed by the Congress have been altered by some thirty Reciprocal Trade Agreements, the average citizen knows almost nothing of them, and if he is ever disposed to think at all about the tariff, the difficulty of securing the pertinent data will promptly discourage him. Those of us who have supported the Trade Agreements Program should be the first to admit that the fixing of import duties by executive agreement has put our tariff schedules beyond the ken of all but those who have a selfish interest in them. The war has obviously added to the confusion. Much of what has happened to our foreign trade since Pearl Harbor will remain a military secret until peace is restored. We

Book Review: The Reciprocal Trade Agreements Program: The Policy of the United States and Its Effectiveness

Book Review: The Reciprocal Trade Agreements Program: The Policy of the United States and Its Effectiveness

The Reciprocal Trade Agreements Program: The Policy of the United States and Its Effectiveness

The Reciprocal Trade Agreements Program: The Policy of the United States and Its Effectiveness

The Reciprocal Trade Agreements Program

The Reciprocal Trade Agreements Program

The Reciprocal Trade Agreements Program: [The Policy of the United States and its Effectiveness].. By James Constantine Pearson. Washington: atholic University of America Press, 1942. pp. xiii, 328. Bibliography. Index. $2.00..

The Reciprocal Trade Agreements Program: [The Policy of the United States and its Effectiveness].. By James Constantine Pearson. Washington: atholic University of America Press, 1942. pp. xiii, 328. Bibliography. Index. $2.00..

The Reciprocal Trade Agreements Program. Grace Beckett

<i>The Reciprocal Trade Agreements Program</i>. Grace Beckett

The Reciprocal Trade Agreements Program.

The Reciprocal Trade Agreements Program.

The Reciprocal Trade Agreements Program.

The Reciprocal Trade Agreements Program.

Book Reviews

Book Reviews

The Reciprocal Trade Agreements Program

The Reciprocal Trade Agreements Program

A Statistical Note on the Trade Agreements Program

A Statistical Note on the Trade Agreements Program

A Statistical Note on the Trade Agreements Program

used to distinguish between gasoline consumption in the city and in the rural or open areas. City as used in this report, means all built-up areas and their suburbs; highway means all other areas. It is true that the greater part of vacation traveling is done outside of built-up areas, but Dr. Kirkpatrick makes necessary deductions on this account later in his report by knocking out such items as travel less than a hundred miles, business travel and so on. To be accurate, he should have given the passenger car's proportion of all gasoline consumed by motor vehicles, which is 75 per cent rather than 35 per cent. Total passenger car consumption, then, is 14,707,296,000 gallons rather than 6,824,I85,344 gallons as Dr. Kirkpatrick would have it. Then, accepting all other premises in the Kirkpatrick formula, we find that total transportation costs when vacationing by automobile are $732,296,000 rather than $339,832,000 as he claims. With this adjustment, and with all other elements in the formula unchanged, the total vacation expenditures work out at $3,969,47I,000 instead of Kirkpatrick's $2,359,208,o0o. This one correction, then, brings him willy-nilly right up into the rarefied atmosphere of $4,ooo,ooo,ooo where the other estimators have been hovering so long. The method adopted by Dr. Kirkpatrick would place vacation expenditures by motoris s at only $I,393,311,000. It so happens that in I938 we were able to obtain estimates from seventeen states on the volume of expenditures by out-of-state vacationing motorists. The total of their replies was more than $,500,oo )o,0oo-substantially above the amount set by Dr. Kirkpatrick for all fortyei ht states and the District of Columbia. If it is true, as traffic counts and surveys indicate, that more than 5o,ooo,ooo people use passenger cars for annual vacation trips, the Doctor's figures would indicate that the average cost of the entire vacation of two weeks is less than $27.oo-or less than $2.00 a day for transportation, accommodation, food and incidentals.