Reciprocal Trade Agreement Definition Us History

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] When President Franklin Delano Roosevelt took office in March 1933, he immediately turned his attention to the domestic economic situation created by the Great Depression. Convinced that the resumption of action would take place at the national level and not abroad, he assured Congress of the passage of a series of far-reaching national economic reforms, which should be known as the first New Deal. His doubts about the ability of foreign economic policy to contribute to the domestic recovery were reflected in his approach at the London Economic Conference. In June 1933, representatives from 66 countries met in London to find a way out of the depression through cooperation in areas such as removing trade barriers and stabilizing exchange rates. The countries that remained on the gold standard, such as France, tried to convince countries that had left the gold standard, in particular the United Kingdom (september 1931) and the United States (in April 1933), to agree on a stabilization of the parity values of their currencies. The chances of success were already slim when, on July 3, Roosevelt dismissed such an agreement as a “purely artificial and temporary experiment,” saying that a “healthy internal economic situation” was more important to a country`s prosperity than the external value of its currency.

The conference ended less than a month later with little to show for their efforts. Today is the 80th anniversary of the Reciprocal Trade Agreements Act (RTAA), a new approach to trade policy adopted by the New Deal Congress and signed by President Franklin D. Roosevelt. RTAA was the first time that Congress and a president worked together to give trade bargaining powers, to help pass new trade agreements that would increase exports and encourage job creation. Through the RTAA, Congress defined the framework for international trade negotiations and authorized the President to play a U.S. leadership role in the international trading system. During World War II, the Department of Foreign Affairs and other government agencies 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.