What Was The Purpose Of The Reciprocal Trade Agreement

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] Although Congress has entrusted the Ministry of Foreign Affairs with primary responsibility for negotiations with other nations, it has instructed the Customs Commission and other government authorities to participate in the development of a list of concessions that could be made abroad or requested abroad in exchange. Any trade agreement should adopt the principle of „unconditional treatment of the most favoured nation“ and allow for a reduction in import duties of up to 50% of the Smoot-Hawley level. Between 1934 and 1945, the United States signed 32 reciprocal trade agreements with 27 countries. [4] In addition, the conclusion of the General Agreement on Tariffs and Trade was taken by the Authority under the RTAA. After the civil war, Democrats were generally in favor of trade liberalization and Republicans in general favored higher tariffs. The model was clearly in the congressional votes on tariffs from 1860 to 1930. Democrats were the minority in Congress in the majority of Congresses between the Civil War and the election of Roosevelt.

During their brief terms in the majority, Democrats passed several bills to reduce tariffs. Examples include the Wilson-Gorman Act of 1894 and the Underwood Tariff Act of 1913. However, successive Republican majorities have always reversed unilateral tariff cuts. [2] From the initial membership of 23 countries, the GATT has grown to 128 countries, responsible for about four-fifths of world trade. In eight rounds of negotiations or „cycles“, GATT member states continued to reduce tariffs, establish anti-dumping rules and increase the level of international trade. At the end of the 20th century, the WTO was attacked by environmentalists, trade unions and proponents of sustainable development in many countries, because the organization was able to repeal national protection laws when they were seen as an obstacle to free trade, and because critics argued that the WTO was promoting an international economic system that favoured rich countries and large private companies at the expense of the poor.