The Reciprocal Trade Agreements Act Of 1934 Accomplished Which Objective

Today is the 80th anniversary of the Reciprocal Trade Agreements Act (RTAA), a new approach to trade policy adopted by the New Deal Congress and signed by President Franklin D. Roosevelt. RTAA was the first time that Congress and a president worked together to give trade bargaining powers, to help pass new trade agreements that would increase exports and encourage job creation. Through the RTAA, Congress defined the framework for international trade negotiations and authorized the President to play a U.S. leadership role in the international trading system. RTAA`s innovative approach freed Roosevelt and Congress from breaking this trend of tariff increases. It has linked U.S. tariff reductions to reciprocal tariff reductions with international partners. It also allowed Congress to approve tariffs by a simple majority, unlike the two-thirds majority needed for other contracts. In addition, the President had the power to negotiate the terms. The three innovations in trade policy have created the political will and feasibility of a more liberal trade policy.

[3] Democrats voted much more in favor of trade liberalization than Republicans, but were not consistent in their preferences. Mp Henry Rainey (D-IL) and members of Roosevelt`s government, Rexford Tugwell, Raymond Moley and Adolf Berle, were skeptical of tariff reductions during the Depression. However, the government decided to use a Democratic-controlled congress and presidency to impose the RTAA. In 1936 and 1940, the Republican Party ran on a platform to lift tariff reductions guaranteed under the RTAA. But when they reclaimed Congress in 1946, they did not act to remove tariffs. In the years since the adoption of the RTAA in 1934, the economies of Europe and East Asia had been decimated by the violence of World War II, which left a huge global production gap filled by American exporters. [2] During the war, the United States had the highest positive balance in its history. Republican preferences for tariffs began to shift as exporters in the home districts began to benefit from stronger international trade. In the 1950s, there was no statistically significant difference between Republicans and Democrats on customs policy, a change that has lasted ever since. [3] The RTAA, which was temporarily updated until 1961, is a multilateral trade negotiation at GATT[16] and negotiations with new Member States.

[17] As more and more U.S. industries began to benefit from tariff reductions, some of them began to campaign with Congress for lower tariffs.

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