The Trade Agreements Act of 1934: A Brief History and Overview
The Trade Agreements Act of 1934, also known as the Reciprocal Trade Agreements Act, was a landmark trade agreement signed into law by President Franklin D. Roosevelt. This act paved the way for free trade and economic globalization, and is still an important law today.
Before the Trade Agreements Act was enacted, the United States had a protectionist trade policy. Tariffs on imported goods were high, in order to protect American industries and jobs. However, this policy had negative consequences, including higher prices for consumers and retaliatory tariffs from other countries.
The Trade Agreements Act changed this policy by authorizing the president to negotiate reciprocal trade agreements with other countries. These agreements would reduce or eliminate tariffs on imported goods, making it easier and cheaper to trade with other countries.
One of the key provisions of the Trade Agreements Act was the creation of the Office of the United States Trade Representative (USTR). The USTR is responsible for negotiating and enforcing trade agreements on behalf of the United States. The USTR also works to protect American intellectual property rights and combat unfair trade practices.
Since its enactment, the Trade Agreements Act has been updated and amended numerous times. In 1979, the Act was amended to include a provision requiring that products purchased by the federal government be made in the United States or in countries that have reciprocal trade agreements with the U.S. This provision is known as the Buy American Act.
More recently, the Trade Agreements Act has played a role in the negotiation of major trade agreements such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP). These agreements have been controversial, with some arguing that they lead to job losses and lower wages for American workers, while others contend that they promote economic growth and consumer choice.
In conclusion, the Trade Agreements Act of 1934 was a landmark law that paved the way for free trade and economic globalization. While it has been updated and amended over the years, its core principles of reciprocal trade agreements and the creation of the USTR remain central to American trade policy today.