When President Franklin Delano Roosevelt took office in March 1933, he immediately became interested in the domestic economic situation created by the Great Depression. Convinced that the recovery would come from measures at home rather than abroad, he assured Congress of the adoption of a series of radical domestic economic reforms that would be known as the First New Deal. His doubts about the ability of foreign economic policy to contribute to domestic recovery were reflected in his approach to the London Economic Conference. In June 1933, representatives of 66 countries met in London to try to find a way out of the depression through cooperation in areas such as the removal of trade barriers and the stabilization of exchange rates. Countries that remained on the gold standard, such as France, tried to convince countries that had left the gold standard, especially the United Kingdom (in September 1931) and the United States (in April 1933), to stabilize the nominal values of their currencies. The chances of success were already slim when Roosevelt on July 3 dismissed such an agreement as a «purely artificial and temporary experiment,» claiming 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. During World War II, the State Department and other government agencies worked on plans to rebuild global trade and payments. They discovered significant gaps in the trade agreement agenda and concluded that they could make better progress through simultaneous multilateral negotiations. After the war, President Harry S. Truman used the RTAA to authorize the United States to join twenty-three different countries that conducted bilateral tariff negotiations on a product-by-product basis, with each country negotiating its concessions for each imported product with the main supplier of that product. The various bilateral bases were combined in the General Agreement on Tariffs and Trade (GATT) signed in Geneva on 30 October 1947.
Minister Hull`s first efforts were to conclude 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 U.S. exporters. However, Hull was only able to negotiate agreements with three out of ten South American countries in September 1939, when the mutual trade program was met with resistance from Latin Americans, who opposed the most-favored-nation clause of abandoning all bilateral agreements with other countries. Given that pressure from Congress in the name of vested interests has allowed Latin American countries to avoid unlimited 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 absorbed much of their exports. When negotiating agreements under the RTAA, the United States generally proceeded by making direct concessions only to the so-called main suppliers, i.e. those countries that were or would become the main source or major source of supply for the product under discussion. The concessions were granted in exchange for opening foreign markets to U.S. exports. In 1934, the Roosevelt administration undertook two initiatives that signaled a desire to reconnect economically with the rest of the world.
The first was the creation of the Export-Import Bank. In February 1934, Roosevelt established the bank as an institution to finance American trade with the newly recognized Soviet Union. The following month, he founded a second import-export bank to finance trade with Cuba; In July 1934, the activities of the second bank were extended to all countries except the Soviet Union. In 1935, the two banks were merged and Congress passed a law that gave the newly unified bank more power and more capital. In the years leading up to World War II, the Export-Import Bank, while lending to countries outside the Western Hemisphere, such as Italy and China, focused its efforts on Latin America, where it proved to be an important element of good-neighborly policy. Reciprocity was an important principle of trade agreements negotiated under the RTAA, as it prompted Congress to lower tariffs. As more and more foreign countries signed bilateral tariff reduction agreements with the United States, exporters were more incentivized to influence Congress for even lower tariffs in many industries. [3] As a result, negotiations on round tables and free trade areas in GATT (later WTO) were included in the negotiating powers of non-tariff measures in the respective legislation, such as.B. the Trade Act of 1974, which was granted to the President, but the power to reduce tariffs was generally similar to the RTAA. .
