Authority To Negotiate Reciprocal Trade Agreements


    President Obama, like President Roosevelt, has made trade policy a central part of his economic strategy to create jobs, growth and strengthen the middle class. In 2013, U.S. exports reached a record high of $2.3 trillion, an increase responsible for one-third of total U.S. economic growth. In addition, each additional $1 billion in exports has supported about 5,600 U.S. jobs, which pay an average of 13 to 18 percent more than non-export-related jobs. The Trade Promotion Authority is needed to build on these benefits and extend U.S. economic leadership into the twenty-first century. As more U.S. industries benefited from tariff cuts, some of them began advocating with Congress for a tariff cut. Until rtaa, Congress had been primarily lobbied by industries that were trying to create or increase tariffs to protect their industry. This change has also helped to secure many of the benefits of trade liberalization.

    In short, the political incentive to increase tariffs has decreased and the political incentive to reduce tariffs has increased. [3] In the last “Uruguay Round” (1986-1994), the GATT created its own successor, the World Trade Organization (WTO), which established basic rules for the replacement of bilateral agreements by a multilateral trading system between more than 140 member countries. The WTO has gone beyond tariff reduction efforts to promote trade liberalization in areas such as global information technology and financial services. The WTO secretariat is based in Geneva, but decisions will be taken by consensus among member states at semi-annual ministerial conferences. Because of the advantages of membership, even former communist countries, including Russia and China, have tried to join. Minister Hull`s initial efforts were to reach reciprocal trade agreements with countries in Latin America, a region considered crucial for the United States. Trade and security, where rival powers (notably Germany) were gaining ground at the expense of American exporters. Hull, however, could negotiate agreements until September 1939 with only three out of ten South American countries, the reciprocal trade program being opposed by Latin Americans who opposed the most-favored-nation`s demand to abandon all bilateral agreements with other countries. Given that pressure from Congress, in the name of special interests, has prevented Latin American countries from fully accessing the U.S. market, these countries would have been seriously hampered in their efforts to sell their raw materials abroad if they had eliminated bilateral agreements with European countries that absorb a large part of their exports.

    From then on, the negotiations of rounds and free trade areas in gatt (subsequent wto) include the power to negotiate non-tariff measures in the legislation in question, as the Trade Act of 1974 was granted to the president, but the power to reduce tariffs was generally similar to the RTAA. . . .