In negotiating agreements under the RTAA, the United States has generally made direct concessions only to so-called primary suppliers – that is, countries that have been or are likely to become the main source or important source of the goods under discussion. The concessions were granted in exchange for opening foreign markets to U.S. exports. 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 Reciprocal Tariff Act (which came into force on June 12, 1934, Chapter 474, 48 Stat. 943, 19 U.S.C No. 1351) provided for the negotiation of customs agreements between the United States and various nations, including Latin American countries. [1] The law served as an institutional reform to allow the president to negotiate with foreign nations a reduction in tariffs in exchange for a reciprocal reduction in U.S.
tariffs. This has led to a reduction in tariffs. The U.S. State Department also found good use of free trade expansion after World War II. Many in the Department of Foreign Affairs saw multilateral trade agreements as a means of integrating the world in accordance with the Marshall Plan and the Monroe Doctrine. U.S. trade policy has become an integral part of U.S. foreign policy.
This search for free trade as diplomacy intensified during the Cold War, when the United States competed with the Soviet Union for relations around the world. [20] When U.S. tariffs fell dramatically, global markets were also increasingly liberalized. Global trade has undergone a rapid transformation. The RTAA was a U.S. law, but it provided the first widely used system of guidelines for bilateral trade agreements. The United States and European nations began to avoid beggar neighborhood policies that pursued national trade objectives at the expense of other nations. Instead, countries have begun to realize the benefits of trade cooperation. After the civil war, Democrats were generally in favor of trade liberalization and Republicans in general favored higher tariffs.