The Archimusic Online Repository



What Is The Purpose Of The Reciprocal Trade Agreement

Under the leadership of the United States and the United Kingdom, international cooperation has flourished and concrete institutions have been 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. [20] [21] 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. Secretary Hull`s first efforts were to reach reciprocal trade agreements with Latin American countries, a region considered crucial to U.S. trade and security, where rival powers (particularly Germany) have gained ground at the expense of American exporters. However, until September 1939, Hull was only able to negotiate agreements with three out of ten South American countries, because the trade agenda was opposed by Latin Americans, who opposed the most favoured national requirement to abandon all bilateral agreements with other countries. Pressure from Congress, in the name of special interests, to ensure that Latin American countries do not have unrestricted access to the U.S. market, these countries would have been seriously hampered in their efforts to sell their raw materials abroad if they had abolished bilateral agreements with European countries that absorb much of their exports. 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. [3] 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] The Trade Promotion Authority aims to create opportunities for domestic workers, just as Roosevelt`s RTAA supported job creation on the national territory by trading with the New Deal programs. The TPA is an important element of trade negotiations because it allows Congress to define the terms of trade negotiations, consultations at Congress during negotiations and legislative procedures for voting on agreements.

President Franklin D. Roosevelt signed the Reciprocal Trade Agreements Act (RTAA) in 1934. It gave the president the power to negotiate bilateral and reciprocal trade agreements with other countries and allowed Roosevelt to liberalize U.S. trade policy around the world. It is generally attributed that it sounded the era of liberal trade policy that continued during the 20th century. [2] The RTAA, which was temporarily updated until 1961, is a multilateral trade negotiation at GATT[16] and negotiations with new Member States. [17] By giving the President the power to negotiate the agreements, Congress effectively ceded to the executive branch some of its power (in accordance with the U.S. Constitution, Article I, Section VIII).