Reciprocal Tariff Act
Pub. L.73–316 | |
Statutes at Large | 48 Stat. 943 |
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Legislative history | |
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The Reciprocal Tariff Act (enacted June 12, 1934, ch. 474, 48 Stat. 943, 19 U.S.C. § 1351) provided for the negotiation of tariff agreements between the United States and separate nations, particularly Latin American countries.[1] The Act served as an institutional reform intended to authorize the president to negotiate with foreign nations to reduce tariffs in return for reciprocal reductions in tariffs in the United States up to 50%. It resulted in a reduction of duties. This was the policy of the low tariff Democrats in response to the high tariff Republican program which produced the Smoot–Hawley tariff of 1930 that raised rates, and sharply reduced international trade. The Reciprocal Tariff Act was promoted heavily by Secretary of State Cordell Hull.
Reciprocal Tariff Act of 1934
President
The RTAA marked a sharp departure from the era of protectionism in the United States. American duties on foreign products declined from an average of 46% in 1934 to 12% by 1962.[3]
Trade agreements under RTAA
Between 1934 and 1945, the United States signed 32 reciprocal trade agreements with 27 countries.[4] Furthermore, the conclusion of the General Agreement on Tariffs and Trade was made by the authority under the RTAA.
History
The authorization under the RTAA has been granted for three years from the day of enactment (June 12, 1934) the RTAA.[5] The authorization was extended to in 1937,[6] in 1940,[7] in 1943,[8] in 1945.[9]
The extension law was not enacted by June 11, 1948, the due date of the extension in 1945, and the right of reduction was revoked. The extension law[10] was established on November 26, 1949, and was extended until June 11, 1951, and then 1951. The year was extended by two years[11] and revoked in 1953 and extended on August 7.,[12] also for one year until 1954. Met. The 1954 extension [12] was also for one year, but from 1955 to the June 30, 1958 extension[clarification needed].[13] The law, which was once revoked in 1958 but extended on 30 August 1960, was enacted.[14][Note 1]
The RTAA, which has been updated intermittently until 1961, is a multilateral trade negotiation in GATT[15] and negotiations with new member states.[16]
The power to cut down expired in 1961, but in November, President Kennedy advocated a new tariff reduction negotiations, which would be called Kennedy Round, and in response, the new tariff reduction, the Trade Expansion Act of 1962,[17] was enacted, and the President was granted the power to reduce tariffs by June 30, 1967.
From then on, rounds and
Differences between RTAA and other trade agreements
Before the RTAA, if Congress wanted to establish a lower tariff for particular
The RTAA's novel approach freed Roosevelt and Congress to break that trend of tariff increases. It tied US tariff reductions to reciprocal tariff reductions with international partners. It also allowed Congress to approve the tariffs with a
By giving the President the authority to negotiate the deals, the Congress effectively ceded a part of its power (authorized under US Constitution, Article I, Section VIII) to the executive branch. The President had to consider the welfare of all Americans, his foreign policy priorities, and what was feasible with other countries in making his decisions on tariffs. Those considerations generally left presidents more inclined to reduce tariffs than the Congress.[18] Whether Roosevelt or Congress foresaw that result is a matter of historical debate.
Historical partisan divide over tariffs and the RTAA
After the Civil War, Democrats were generally for
By the Great Depression, tariffs were at historic highs. Members of Congress commonly entered in informal
Democrats voted for trade liberalization far more often than Republicans but were not uniform in their preferences. Democrats skeptical of reducing tariffs during the Depression included Representative
Réciprocité
Another key feature of the RTAA was that if Congress wanted to repeal a tariff reduction, it would take a two-thirds supermajority. That means that the tariff would have to be especially onerous, and the Congress would have to be especially protectionist. Once enacted, tariff reductions tended to stick.[3]
As more American industries began to benefit from tariff reductions, some of them began to lobby Congress for lower tariffs. Until RTAA, Congress had been lobbied mostly by industries seeking to create or increase tariffs to protect their industry. That change also helped to lock in many of the gains in trade liberalization. In short, the political incentive to raise tariffs decreased, and the political incentive to lower tariffs increased.[3]
World changes caused by RTAA
As American duties dropped off dramatically, global markets were also increasingly liberalized. World trade expanded rapidly. The RTAA was a US law but provided the first widespread system of guidelines for bilateral trade agreements. The United States and the European nations began avoiding
Led by the United States and the United Kingdom, international co-operation flourished, and concrete institutions were created. In talks begun at the Bretton Woods Conference of 1944, the International Monetary Fund was created. By 1949, the first international board governing trade, the General Agreement on Tariffs and Trade (GATT), had been established. In 1994, the GATT was replaced by the World Trade Organization (WTO), which still oversees international trade agreements.[19][20]
The
Notes
- ^ This Act has amended Article 2 (c) (19 U. SC 135 1352 (c)) of the 1934 Reciprocity–Commerce–Committee Act in which the extension law up to that stipulates the period of authority. In contrast, the 1958 Extension Act stipulates that Article 2 itself will extend the time limit.
References
- ^ "The Institutional Roots of American Trade Policy: Politics, Coalitions, and International Trade." Michael Bailey, Judith Goldstein, and Barry Weingast. World Politics, Volume 49, No. 3, 1997."
- ^ S2CID 155043044.
- ^ S2CID 154711958.
- ^ U.S. Department of Commerce, Foreign Commerce Weekly, March 16, 1946, p. 31
- ^ June 12, 1934, ch. 474, 2 2, 48 Stat. 944
- ^ Mar. 1, 1937, ch. 22, 50 Stat. 24
- ^ Apr. 12, 1940, ch. 96, 54 Stat. 107
- ^ June 7, 1943, ch. 118, 1, 1, 57 Stat. 125
- ^ July 5, 1945, ch. 269, 1, 1, 59 Stat
- ^ Sept. 26, 1949, ch. 585, 3 3, 63 Stat. 698
- ^ June 16, 1951, ch. 141, 2 2, 9 (a), 65 Stat. 72, 75
- ^ a b Aug. 7, 1953, ch. 348, title I, 101 101, 67 Stat. 472
- ^ July 1, 1954, ch. 445, 1, 1, 68 Stat. 360; June 21, 1955, ch. 169, 2 2, 69 Stat. 162
- ^ Pub. L. 85-686, 2 2, Aug. 20, 1958, 72 Stat. 673
- ^ 1st to 4th and Dillon round
- ^ For example, it became the basis of the United States tariff reduction under the Japan Accession Protocol.
- ^ Pub. L. 87-794, Oct. 11, 1962, 76 Stat. 872
- ^ .
- ^ a b Oatley, Thomas (2010). International Political Economy. pp. 71–113.
- .