Definition 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] During World War II, the Department of Foreign Affairs and other government authorities worked on plans to rebuild world trade and payments. They discovered significant gaps in the trade agreement agenda and concluded that they could make progress through simultaneous multilateral negotiations. After the war, President Harry S. Truman took advantage of RTAA to allow the United States to join 23 separate countries conducting bilateral customs negotiations on a product-based basis, with each country negotiating its concessions on each imported product with the main supplier of that commodity. The various bilateral meetings were summarized as part of the General Agreement on Tariffs and Trade (GATT) signed in Geneva on 30 October 1947. Reciprocity was an important principle of trade agreements negotiated under the RTAA, as it encouraged Congress to reduce tariffs. As more and more foreign countries have entered into bilateral tariff reduction agreements with the United States, exporters have been more encouraged to promote Congress in favour of even lower tariffs in many sectors.

[3] 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) 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. The RTAA, which was temporarily updated until 1961, is a multilateral trade negotiation at GATT[16] and negotiations with new Member States. [17] 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 or requested from foreign countries 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. 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] 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

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