Were Reciprocal Trade Agreements A Good IdeaPosted: December 20th, 2020 | Author: Paul | Filed under: Uncategorized | Leave a comment »
Between 1934 and 1939, the Roosevelt administration entered into trade agreements with 19 countries under the Reciprocal Trade Agreements Act: Belgium, Brazil, Canada, Colombia, Costa Rica, Cuba, Czechoslovakia, Ecuador, El Salvador, Finland, France, Guatemala, Haiti, Honduras, the Netherlands, Nicaragua, Sweden, Switzerland and the United Kingdom. After 1945, the customs negotiation procedure established under the RTAA programme formed the model of the General Agreement on Tariffs and Trade (GATT), the agreement signed in 1947 by 23 countries, which formed the framework for multilateral trade liberalization after the Second World War. As more and more U.S. industries began to benefit from tariff cuts, some of them began campaigning with Congress for lower tariffs. Until RTAA, Congress had been mainly pressured by industries that wanted to create or increase tariffs to protect their industry. This change has also helped to maintain many of the benefits of trade liberalization. In short, the political incentive to increase tariffs has diminished and the political incentive to reduce tariffs has increased.  Reciprocity was an important principle of trade agreements negotiated under the RTAA, as it encouraged Congress to reduce tariffs. As more and more foreign countries have entered into bilateral tariff reduction agreements with the United States, exporters have been more encouraged to promote Congress in favour of even lower tariffs in many sectors.  Under the leadership of the United States and the United Kingdom, international cooperation flourished and concrete institutions were created. The discussions that began at the Bretton Woods Conference of 1944 were the International Monetary Fund. The first international trade agreement, the General Agreement on Tariffs and Trade (GATT), was established in 1949. In 1994, THE GATT was replaced by the World Trade Organization (WTO), which still controls international trade agreements.
  When President Franklin Delano Roosevelt took office in March 1933, he immediately turned his attention to the domestic economic situation created by the Great Depression. Convinced that the resumption of action would take place at the national level and not abroad, he assured Congress of the passage of a series of far-reaching national economic reforms, which should be known as the first New Deal.