1 / 26

U.S. Trade: An Historical Perspective

U.S. Trade: An Historical Perspective. AFTER WORLD WAR I FARM PRICES WENT INTO A SHARP DECLINE FARMER SOUGHT PROTECTION FROM WHAT THEY CONSIDERED CHEAP FOREIGN PRODUCTS.

gent
Download Presentation

U.S. Trade: An Historical Perspective

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. U.S. Trade:An Historical Perspective

  2. AFTER WORLD WAR I FARM PRICES WENT INTO A SHARP DECLINEFARMER SOUGHT PROTECTION FROM WHAT THEY CONSIDERED CHEAP FOREIGN PRODUCTS

  3. The recession of 1920-1921 marked the end of a burst of prosperity for the American farmer, as Europe had recovered from the ravages of war and no longer required large quantities of American agricultural products..

  4. The surplus of farm goods could no longer be absorbed in the national market and agricultural prices dropped rapidly in the United States

  5. Gross agricultural income fell from $17.7 billion in 1919 to $10.5 billion in 1921.

  6. The number of farm foreclosures per thousand told a tragic story. From 1913 to 1920, it averaged only 3.2 per thousand farms, increasing to 10.7 per thousand from 1921 to 1925, and 17 per thousand from 1926 to 1930. The tariff became a major issue in 1920s America as prices of wheat, corn, meats and cotton declined to one-third of their wartime values.

  7. Tariffs were granted on many agricultural products.The Tariff Act of 1922 - the Fordney-McCumber TariffThis tariff gave the United States the highest tariff rate on agricultural products of any developed country.

  8. Europe and Canada reacted by increasing their tariffs – the U.S. reacted with the infamous Hawley-Smoot Tariff .

  9. After Franklin Roosevelt was elected – there was an effort to reduce trade constraints and attempt to move out of the Great Depression.

  10. The Trade expansion act was designed to help pry the economy out of the Depression

  11. Initiated bilateral negotiations and application of Most Favored Nation (now referred to as Normal Trade Relations -NTR) The products from all countries that have been given NTR are subject to the same tariffs when they enter the United States. When the United States lowers tariff rates, or eliminates or changes tariff rates, that change is applied equally to all NTR countries

  12. After World War II – A new economic order – the United States taken over the role as the leading political and economic power.

  13. The Marshall Plan Secretary of State George C. Marshall Devastated by the war, Europe had just survived one of the worst winters on record. The nations of Europe had nothing to sell for hard currency. Something had to be done, both for humanitarian reasons and also to stop the potential spread of communism westward.

  14. International Monetary Fund and the World Bank The IMF was established to smooth world commerce by reducing foreign exchange restrictions and using its reserve of funds to lend to countries experiencing temporary balance of payments problems so they could continue trading without interruption.

  15. International Monetary Fund and the World Bank The World Bank focused on making loans to governments in order to rebuild railroads, highways, bridges, ports and other "infrastructure", i.e., the parts of the economy that are not profitable for private companies to build so they are left to the public sector (the taxpayers).

  16. GATT – General Agreement on Tariffs and Trade Geneva -- 1947

  17. Major Points of GATT:Import and export duties are the only legitimate trade barriers.Export subsidies and price and income supports should not be used to seek an unfair advantage in trade.

  18. Kennedy Round of GATT – Geneva 1964-1967 The Kennedy Round was named after the US president who had died the previous year. This was partly in his memory and partly because President Kennedy had secured the 1962 US Trade Expansion Act which authorized the US government to negotiate tariff cuts of up to 50%, a key factor allowing the talks to take place.

  19. Kennedy Round of GATT – Geneva 1964-1967One of the most comprehensive rounds of GATTWas successful in reducing protection on a variety of industrial products.

  20. Agriculture was much harder.

  21. The Tokyo Round of GATT The Tokyo Round took a broader look at the trade rules than its predecessor, the Kennedy Round, with mixed results. The talks failed to come to grips with fundamental reforms in agricultural trade. The Europeans viewed its agricultural protection policies as nonnegotiable.

  22. The Uruguay Round -- 1986 The Uruguay Round turned out to be the longest, most complicated, and the last of the GATT rounds. It took seven and a half years to complete, and it led to the most fundamental reform of world trade rules since GATT itself was created in 1948.

  23. Eventually three areas of agreement were reached:Market AccessExport Subsidies Internal Price Supports

  24. All trade barriers were to be converted to tariffs .. Then the tariffs were to be slowly eliminated.

  25. No new export subsidies and the old subsidies were to be slowly reduced.

  26. The World Trade Organization was formed in 1995 – GATT was now part of history.

More Related