Trade Politics

TRADE POLITICS

2005

Trade Politics

Introduction

The dawn of the twentieth century and in particular the events of the First and Second World Wars heralded a major shift in the face of world economic domination . The previously successful British hegemony had fallen into severe decline and the time was ripe for the ascension of the United States as the new leader of the world stage . America however appeared to a large extent to disagree , offering contradictory actions and responses to the new economic world puzzle and to all intents and

br purposes deferred officially assuming this new mantle until many years later

In this essay I will critically review , contrast and compare three articles of recent times that have sought to understand the emerging U .S . Economic Trade Polices of the earlier half of the twentieth century in an effort to understand why this might have been the case and attempt to clearly make an argument that applies to all three Article One

In The Impact of Ideas on Trade Policy the Origins of U .S Agricultural and Manufacturing Policies (International Organiszation Vol .43 . Autumn 1989 ) Judith Goldstein investigates the association between the varying ideas ' that shaped the development of trade polices , in particular with reference to the differences of opinion between advocates of the agricultural polices of Depression era America (which took a more wholly protectionist stance ) and the policies regarding industry (namely manufacturing ) which utilised both aspects of protectionism and liberalisation combined

Ms Goldstein states that

In the 1930s , the United States laid the foundation for two different commercial policies . In one , the government legislated measures to liberalize ' trade policy by ensuring non-discrimination , opposing quantitative restrictions and negotiating tariff reductions based on unconditional most-favored-nation principles . Almost simultaneously in the other , the United States enacted import restrictions , export subsidies and import fees to stabalize farm incomes

This , she maintains is a direct result of the Great Depression , before which .both agriculture and manufactures were treated essentially alike ' Indeed , she advises that . when either suffered economic decline , the usual state response was to increase trade barriers These trade barriers were generally introduced through the use of tariffs , which were at the time considered one of the State 's .[F]ew constitutionally granted tools for economic manipulation . the impulse to use the tariff , [along with] the presence of a weak penetrated Congress , and the depressed economy , led to the passage of the Smoot-Hawley act . On its heels came the Great Depression and the attribution of economic decline with the use of the protective tariff

In the wake of this , Ms Goldstein explains that Trade liberalization and farm subsidies followed ' and that although the . economic decline of the 1930s undermined existing economic policy ' there was , in reality no single dominant explanation for the causes and cures for these economic problems ' It was this , she says that forced policy makers to consider alternative policy options

In the course of the article Ms Goldstein traces the .divergence in industrial and farm policies...