The Reciprocal Trade Agreements Program 9780231896917

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T H E RECIPROCAL TRADE A G R E E M E N T S PROGRAM

GRACE

THE

BECKETT

RECIPROCAL

TRADE

AGREEMENTS

PROGRAM

COLUMBIA UNIVERSITY NEW YORK

1941

PRESS

COPYRIGHT COLUMBIA UNIVERSITY

1941 PRESS, N E W

YORK

F O R E I G N AGENTS: O X F O R D U N I V E R S I T Y P R E S S , H u m p h r e y

Milford,

Amen House, London, E.C. 4, England, AND B. I. Building, Nicol Road, Bombay, India; MARUZEN COMPANY, LTD., 6 Nihonbashi, Tori-Nichome, Tokyo, J a p a n M A N U F A C T U R E D I N T H E U N I T E D STATES OF AMERICA

T o R . M . B , AND M . H . B .

PREFACE analysis of the reciprocal trade agreements program in action is based upon a doctoral dissertation written at the Ohio State University. The dissertation consisted of three main sections, namely, (1) a survey of recent trends in international trade and finance, (2) an examination of the trade agreements program, and (3) an evaluation of the program in terms of international trade theories. Only the second section is included here. It has undergone extensive revision and condensation. The study does not pretend to be comprehensive. Commercial policy cannot be evaluated adequately without /elating it to a nation's general policies, both domestic and foreign. The limited scope of these pages precludes any extensive evaluation, but the material presented may contribute something toward such an undertaking. Part of Chapter I I appeared as an article, "The Problem of Reclassification in the Reciprocal Trade Agreements," in the Journal of Political Economy, April, 1940. It is reprinted here with the permission of the Journal and the University of Chicago Press. Permission was granted by the Harvard Quarterly Journal of Economics to reproduce portions of an article in the November, 1940, issue, namely, "Effect of the Reciprocal Trade Agreements upon the Foreign Trade of the United States." The author wishes to thank the American Scholar, the Journal of Marketing, and the Pi Lambda Theta Journal for permission to use here paragraphs previously published in their notes and communications sections. The courtesy extended by publishers of copyrighted and other material is appreciated. The source of any material here reproduced is clearly marked in each case. I take this opportunity to acknowledge the criticism of my dissertation by the reading committee of the Department of Economics at the Ohio State University. I am particularly indebted to Dr. Clifford L. James for patient guidance and valuable suggestions while the manuscript was in its early stages. G. B. Indianapolis, Ind. February 24, 1941 T H I S BRIEF

CONTENTS I. II.

Adoption of a Trade Agreements Program

1

Administration of the Amendment to the Tariff Act of 1930

18

III.

General Provisions of the Reciprocal Trade Agreements

36

IV.

Concessions Obtained in the Reciprocal Trade Agreements for Exports from the United States

53

Concessions Granted in the Reciprocal Trade Agreements on Imports into the United States

66

Effect of the Reciprocal Trade Agreements upon the Foreign Trade of the United States

75

V. VI.

Appendix I. Types of Most-favored-Nation Treatment in Force January, 1940, between the United States and Foreign Countries 115 Appendix II.

Values of Foreign Monetary Units, 1940

116

Appendix III.

Public Acts and Resolutions

120

Appendix IV.

Trade Agreements Signed

124

Appendix V.

United States Foreign Trade, 1910-1939

126

United States Exports to Trade Agreement Countries, 1929 and 1934 127 United States Imports from Trade Agreement Countries, 1929 and 1934 128 Bibliography

129

Index

139

TABLES 1.

Change in Exports from Selected Commercial Nations, 1933 Compared with 1929

3

2.

Trade Agreements Agencies and Procedure

19

3.

United States Imports of Tracing Cloths by Principal Sources, in Selected Years, 1929 to 1937

22

United States Imports of Cotton Yarn from Principal Sources, 1937

26

4. 5. 6. 7. 8.

Tariff Paragraphs Modified by Reciprocal Trade Agreements Number of Concessions Obtained in Reciprocal Trade Agreements for Exports from the United States Quota Concessions Obtained in Reciprocal Trade Agreements for Exports from the United States

28 54 54

Percent of United States Exports on Which Concessions Were Obtained in the Reciprocal Trade Agreements

58

Number of Concessions Made by the United States in Trade Agreements in Effect January 1, 1940

66

10.

Duties Collected upon United States Imports for Consumption, and Equivalent ad valorem Rates under Respective Tariff Acts, 1913 to 1930

67

11.

Annual Indexes of United States Foreign Trade and Industrial Production, 1926 to 1939

79

12.

Share of the United States in World Trade, 1929 to 1938

84

13.

United States Trade with Trade Agreement and Nonagreement Countries, 1936 to 1939 United States Exports (Including Reexports) to Trade Agreement and Nonagreement Countries in Selected Years, 1934 to 1939

87

United States Exports (Including Reexports) to Individual Trade Agreement Countries in Selected Years, 1934 to 1939

89

9.

14.

15.

86

xii

TABLES

16.

Percent of Total Imports into Trade Agreement Countries Supplied by the United States, 1934 to 1938

91

Canada: Percentage Distribution of Imports by Principal Countries in Selected Years, 1934 to 1938

92

Percent of Total Imports into Nonagreement Countries Supplied by the United States, 1934 to 1938

93

Percent of Imports into Sixteen Trade Agreement Countries and into Twenty Nonagreement Countries from the United States and from Other Countries, 1934 to 1938

94

17. 18. 19.

20.

21. 22. 23.

United States Imports for Consumption from Trade Agreement and Nonagreement Countries in Selected Years, 1934 to 1939 United States Imports for Consumption from Individual Trade Agreement Countries in Selected Years, 1934 to 1939

95 96

Canada: Percentage Distribution of Exports by Principal Countries in Selected Years, 1934 to 1938

98

Percent of Imports into the United States from Sixteen Trade Agreement Countries and Twenty Nonagreement Countries, 1934 to 1938

99

24.

Percent of Total Imports into the United States Supplied by Nonagreement Countries, 1934 to 1938 100

25.

Canadian Imports of Commodities Included in the Trade Agreement with the United States, 1935 and 1936 101

26.

Change in Canadian Imports from the United States of Commodities Included in the Trade Agreement between the United States and Canada, Yearly Average, 1936-38, over 1935 102

27.

Netherlands Imports of Commodities Included in the Trade Agreement with the United States in Selected Years, 1934 to 1937 103

28.

Swiss Imports of Commodities Included in the Trade Agreement with the United States in Selected Years, 1934 to 1937 104 Percent of Total Imports into the United States Supplied by Trade Agreement Countries, 1934 to 1938 105

29.

TABLES

xiii

30.

United States Imports for Consumption from Canada of Commodities Included in the Trade Agreement with Canada, 1935 and 1936 106

31.

United States Imports for Consumption of Commodities Included in the Trade Agreement with Brazil, 1937 and 1938 107

32.

United States Imports for Consumption of Commodities Included in the Trade Agreement with Sweden, 1937 and 1938 108

33.

United States Imports for Consumption of Commodities Included in the Trade Agreement with Belgium, 1937 and 1938 109

34.

United States Imports for Consumption of Commodities Included in the Trade Agreement with the Netherlands, 1937 and 1938 110

35.

United States Imports for Consumption of Commodities Included in the Trade Agreement with France, 1937 and 1938 110

36.

United States Imports for Consumption of Commodities Included in the Trade Agreement with Switzerland, 1937 and 1938 111

CHARTS I. II. III. IV. V. VI.

Change in Exports from Selected Commercial Nations, 1933 compared with 1929

4

Annual Indexes of United States Foreign Trade and Industrial Production, 1926 to 1939

81

United States Foreign Trade as Percentage of Total World Trade, 1929 to 1938

85

Change in United States Exports and Imports, 1938-39 (average) over 1934-35

88

United States Exports to Individual Trade Agreement Countries in Selected Years, 1934 to 1939

90

United States Imports from Individual Trade Agreement Countries in Selected Years, 1934 to 1939

97

CHAPTER I ADOPTION

OF

A

TRADE

AGREEMENTS

PROGRAM

INTRODUCTION

objective of the present study is to state the aims, analyze the technique, and evaluate the effects of the reciprocal trade agreements program. The change in the tariff policy of the United States in 1934 was intimately connected with a series of problems which emerged during the post-World War period. 1 Between 1919 and 1933 there were many disturbances in international economic relations. The war had both accelerated existing tendencies toward change and created new dislocations of its own. These factors were reflected in the international balance of payments. Since the inward and outward payments from one nation to another appear annually in each nation's international balance of payments, this so-called "balance sheet" serves as a focal point for international economic disturbances. Here all difficulties in making and securing payment for commodity, service, or capital items appear. T H E PRIMARY

After the war particular difficulty existed in the merchandise items of the balance of payments, because agricultural and industrial production had not been equated to effective demand. International trade in these commodities was confined by restrictive devices in the form of high tariffs, quota systems, import licensing, clearing agreements, compensation arrangements, sanitary measures, and foreign exchange controls. When these formalities multiplied, they hampered trade greatly. Disturbances existed also in long and short-term capital and gold movements. The heavy borrowing of European debtor nations di1 Any reader who is not familiar with the outstanding international economic problems and trends of the postwar period is referred to suggested readings in the bibliography. Careful study of some of the books listed there will furnish criteria for evaluating the reciprocal trade agreements program.

2

A D O P T I O N OF A P R O G R A M

verted the flow of capital from sections of the world where natural resources were abundant and where agriculture and industry were growing to sections of the world which were industrialized and highly organized. T o a considerable degree the prewar movement of capital had resulted in direct investments abroad of long-term loans for productive purposes. T h e postwar movement of loans was predominantly short-term, motivated by fear and the chance of speculative investment. From being a compensating and stabilizing item in the international balance of payments, short-term loan transactions grew to be a major cause of maladjustment. T h e erratic fluctuations of these balances, together with the unsuccessful stabilization of the currencies of some important nations, necessitated frequent gold movements, resulting in maldistribution of the world's gold supply. Although characteristics of the industrial and investment boom appeared between 1927 and 1929, the effects of additional unstabilizing elements accumulated. A world economic crisis came in 1931, followed by increased restrictions on international commerce and departure by the leading nations from the gold standard. Inventories mounted, production fell off, and international trade dwindled. Reparation and war-debt payments practically ceased. Private debt obligations remained frozen. As each nation attempted to shelter its own industry and at the same time extend its outward commerce, trade restrictions competed with currency depreciation for dominance. When it became increasingly evident that the various national measures uftdertaken were probably making the depression more severe, the World Economic Conference of 1933 was convened. The positive results of the Conference were negligible. No agreement was reached upon the two topics which occupied the central position in conference discussions, namely, currency stabilization and tariff reduction. After international action to ameliorate postwar economic maladjustments had failed, the Congress of the United States undertook the liberalization of international commodity movements. T h e reduction of trade barriers seemed to promise some aid to domestic recovery in the United States. Between 1929 and 1933 world trade had decreased 64.6 percent, but the foreign trade of the United States had dropped off proportionately more than that of other nations, namely, 75.2 percent. The depression in the United States had continued, despite manifold efforts to curb it.

A D O P T I O N

OF

A

TABLE

3

P R O G R A M 1

CHANGE IN E X P O R T S FROM SELECTED COMMERCIAL NATIONS, 1933

COMPARED W I T H

1929

(Unit: $1,000,000*) COUNTRY

World United States United Kingdom Germany f France Canada $ Japan Italy Netherlands

DECREASE, 1 9 3 3 OVER 1 9 2 9

EXPORTS

1929 33,040.0 5,157.1 3.549.4 3,211.6 1.965.5 1.224.6 969.8 801.4 799.7

1933 11,699.0 1,279.6 1,212.6

1,154.6 724.1 422.0 365.9 314.7 292.4

Value

21,341.0 3,877.5 2,336.8 2,057.0 1,241.4 802.6 603.9 486.7 507.3

Percent

64.6 75.2 65.8 64.0 63.2 65.5 62.3 60.7 63.4

Source: League of Nations, Statistical Yearbook, 1933-34, pp. 1 9 4 - 9 5 . * In terms of old United States gold dollars, t Includes reparations deliveries. + Includes exports of bullion and specie of domestic origin, and reexports.

Surpluses of commodities (agricultural products conspicuously) had piled up on the domestic markets, commodities which were formerly sold on foreign markets. Many Congressmen came to believe firmly that domestic recovery would not appear until after recovery in foreign trade. Consequently, American action to remove trade barriers was apparently essential and expedient. POSSIBLE

ALTERNATIVE

POLICIES

Several alternative policies for the reduction of trade restrictions were open to the United States. Among these were the continuation of the Tariff Act of 1930 with further use of the so-called "flexible" provision, general Congressional revision, primarily in the form of horizontal reductions, selective Congressional revision, or tariff reduction through bilateral agreements. The bilateral agreements might be negotiated, with or without an exclusion list of commodities upon which duty concessions were not to be granted, and reductions might be offered as exclusive privileges or under the provision of conditional or unconditional most-favored-nation treatment. Continuation of the Tariff Act of 1930 did not appeal to an administration pledged to reduce the tariff. The flexible provision of the

4

-100

CHANGE

A D O P T I O N Percentage Decrease

-75

IN

-50

EXPORTS

-25

FROM

OF

A

0

SELECTED

COMPARED W I T H Source: L e a g u e of N a t i o n s , Statistical

Yearbook,

P R O G R A M Percentage

25

50

COMMERCIAL

Increase

75

NATIONS,

100

1933

1929 1933-34, pp. 194-95.

Tariff Act of 1930 (Section 336) was not flexible enough to be instrumental in modifying tariff restrictions adequately. Its operation would probably have been very cumbersome and slow. Nor would its use have insured a simultaneous reduction of foreign trade barriers.

A D O P T I O N OF A P R O G R A M

S

Unilateral action by the United States would not have been effective in securing the immediate reduction of foreign tariffs and the liberalization of quota provisions, which frequently discriminated against American exports. Although a general tariff reduction by the United States would have opened her markets to imports, it would not necessarily have enabled her to sell more products abroad, at least for a few years. Because of the grave unemployment situation in the United States, action was needed which would simultaneously open markets at home and abroad. General tariff revision would undoubtedly have been too drastic a measure for the removal of international trade restrictions at this time. It would have been the type of remedy that kills the patient in attempting to cure the disease. A long discussion took place on the subject of bilateral trade agreements. Some Congressmen advocated the composition of a list of commodities which were not to be subject to concession treatment. The establishment of an exclusion list would have taken much time and discussion and would have seriously limited the possibilities of negotiation. The granting of reciprocal trade reductions as an exclusive privilege would have resulted in "strait-jacketing" trade in certain lines determined by tariff bargaining, rather than in natural trade advantages built upon differences in natural resources, and would have been contrary to the previous American tariff policy of nondiscrimination and equal treatment of all. There was much debate upon the alternative policies of the bilateral trade agreement with a conditional or with an unconditional mostfavored-nation clause. Under conditional most-favored-nation treatment, the United States would grant tariff privileges to a third country with which she had a most-favored-nation agreement only upon receiving from that country the same concession or a concession equivalent to that received from the most-favored-nation. Suggested advantages of such treatment were that through this method treaty negotiation and the driving of significant bargains would be facilitated at the same time that quota and exchange arrangements were protected. Adherents to the unconditional clause maintained, on the other hand, that unconditional most-favored-nation treatment was preferable. Under such treatment the United States would grant tariff

6

ADOPTION

OF A

PROGRAM

privileges to a third country with which she had a most-favored-nation treaty immediately and unconditionally, without the necessity of receiving a quid pro quo in each specific case. The opinion was stated that if this type of tariff bargaining were once begun, it would be continued and expanded. Such a procedure did not invite retaliatory measures entailing the offsetting of trade gains in one quarter with trade losses in another. Nor did such a procedure involve the problem of determining an equivalent concession, necessitating constant individual negotiations and resulting in consequent uncertainty. Adoption by the United States of anything but unconditional mostfavored-nation treatment would have compelled the termination of all the unconditional most-favored-nation agreements to which we were a party in 1934. This would have deprived American exports of legal protection and equal treatment in the countries concerned. The same thing would have been true of the majority of conditional mostfavored-nation agreements to which we were a party, because, in most cases, conditional agreements had in practice been interpreted unconditionally. Retaliatory measures might have ensued. A surrender of valuable bargaining power would have been necessary in order to restore equal treatment. Upon due consideration of the various possible alternative tariff policies, the policy of bilateral (or reciprocal) trade agreements with unconditional most-favored-nation treatment was selected by the United States as the technique with which to attempt reduction of international trade restrictions. DEVELOPMENT

OF THE RECIPROCAL

TRADE

POLICY

For some time previous to 1934 sentiment in favor of bilateral trade negotiations, as the policy for solving the problem, had been mounting.2 Various organizations outside Congress suggested that the course of bilateral trade negotiation be taken. The American Exporters' and Importers' Association, for example, petitioned Congress for a reciprocal tariff law extending conditional most-favored-nation treatment, with the scope of reciprocity limited to a list of certain specified products.'1 The National Automobile Chamber of Commerce 2 The reader is referred to Tasca, The Reciprocal Trade Policy of the United Chaps. I I and III, for a detailed discussion of the evolution in policy. - New York Times, Dec. 20, 1931, Sec. 2, 19: 7.

States,

7

A D O P T I O N OF A PROGRAM 4

and the American Manufacturers' Export Association came out in favor of reciprocity."' The Democratic platform for the Presidential election of 1932 advocated reciprocal trade agreements, 0 and many of the Democratic candidate's speeches emphasized the policy. Since 1931 reciprocal pacts had been mentioned in Congress, and from time to time bills had been introduced. 7 One of the earlier bills was the Collier tariff bill, providing for executive reciprocal trade agreements. 8 Congress passed the bill, but the President vetoed it. 0 Certain Senate resolutions providing for the United States Tariff Commission to collect data pertaining to American trade with foreign countries and to present the implications of a tariff bargaining policy, were carried out. 10 The Tariff Commission collected the requested data and in addition made certain recommendations. The Commission suggested the unconditional most-favored-nation clause and either bilateral tariff bargaining or a minimum tariff effective for countries having most-favored-nation agreements with us or not unreasonably burdening our trade, with concessions limited by minimum rates enacted by Congress, a uniform percentage reduction, or different percentages for categories to be defined. 11 Late in March, 1933, the newspapers began to carry rumors that the President was going to ask Congress for the authority to negotiate I

In 1932. Any reader who is interested in following closely the suggestions offered by the above-mentioned organizations or similar groups will find an examination of their press releases for the years immediately preceding 1934 valuable. G This particular plank of the platform provided for "a competitive tariff for revenue, with a fact-finding tariff commission free from executive interference" and "reciprocal tariff agreements with other nations." New York Times, June 30, 1932, 1: 7; 15: 4. 7 Mr. Hull, then a member of Congress, suggested reciprocal trade pacts. Ibid,., J u n e 2, 1931, Sec. 1, 27: 1. One senator urged the repeal of the Tariff Act of 1930 in order to institute a 25-percent horizontal tariff reduction, together with an additional 25-percent reduction to those nations increasing their purchases of certain American goods. Ibid., Aug. 16, 1931, Sec. 1, 24: 3. A member of the House of Representatives was in favor of a policy of reciprocity, lowering our tariff, and giving reduced duties when foreign countries reduced some of their duties for us. * Congressional Record, 72d Cong., 1st sess., Vol. L X X V (Part 15), H.R. 6662. 0 Two of his reasons were, first, that if tariff duties were reduced at a time of widespread unemployment, domestic welfare might be endangered and, secondly, that if the bill instituted a preferential tariff system, trade wars might ensue. Congressional Record, 72d Cong., 1st sess., L X X V (Part 9), 10035-37. 10 Congressional Record, 72d Cong., 2d sess., Vol. L X X V I (Part 6), Sen. Res. 325, Sen. Res. 334. II The Commission also pointed out the possibility of illusory foreign concessions if a bargaining procedure were adopted.

A D O P T I O N OF A PROGRAM

8

executive trade agreements within certain limits, probably without Senate ratification or perhaps with Congressional retention only of the power to reject an agreement within sixty days after it had been concluded. 12 Protectionist groups at once became alarmed and announced that they would request Congressional hearings upon the proposed bill, if it were introduced into Congress. 13 A little later newspapers carried items stating that a bill had actually been drawn up asking for presidential authority to negotiate multilateral horizontal reduction treaties at the London Conference, as well as the power to negotiate bilateral treaties with a maximum of 40 percent reduction or if possible a maximum greater than 50 percent and authority to transfer items to the free list. Evidently the administration believed the introduction of such a bill at this time was politically inexpedient and that consequently an end should be put to the recurrent rumors. T h e President announced that the tariff bill would not be submitted to Congress during the current session. 14 Early in July instructions were sent to the American embassies in Argentina, Brazil, Colombia, Portugal, and Sweden to begin exploratory studies on the possibility of reciprocal trade treaties. 15 After a favorable reply 10 had been received from these countries, an InterDepartmental Advisory Board on Reciprocity Treaties was set up, to prepare a report upon the exploratory conversations. 17 No treaties resulted from the negotiations. 18 The exploratory activity was followed by an announcement from Secretary of State Cordell Hull in August, 1933, that the United States would be willing to negotiate bilateral trade pacts with countries sending non-competitive products to the United States. 19 A little later a White House statement declared that "Now the time has come 12

13 New York Times, March 23, 1933, 1: 6. Ibid., April 2, 1933, Sec. 2, 16: 1. A suggestion was made, nevertheless, that some reciprocal treaties might be negotiated during the period of Congressional recess and submitted to that body for ratification during its next session. Ibid., June 10, 1933, 2 : 7 . 15 These countries were selected because of the nature of their commodity exports. The possible difficulty of an Argentine treaty was recognized. 16 Brazil did not give full approval at this time because it was awaiting the submission of views by several of its government departments. Department of State, Treaty Information, no. 46, July, 1933, pp. 19-20. 17 The Board included members from the Departments of State, Agriculture, and Commerce, and the Tariff Commission. 18 A treaty was signed with Colombia, but it did not receive the legislative sanction of either government. Department of State, Treaty Information, no. SI, Dec. 1933, p. 6. 19 New York Times, Aug. 8, 1933, 11: 1. 14

A D O P T I O N OF A PROGRAM

9

to initiate the second part of the program and to correlate the two parts, the internal adjustment of production with such effective foreign purchasing power as may be developed by reciprocal tariffs, barter, and other international arrangements." 20 An Executive Commercial Policy Committee was formed in November, 1933, to centralize the supervision of government action pertaining to import and export. 21 This Committee suggested that legislation be sought delegating to the President certain limited tariff powers. 22 These powers were not asked for at once. There was much time consumed in drawing up a bill,2:1 and delay followed upon Secretary Hull's trip to the Pan-American Conference at Montevideo, so that it was not until the President's message to Congress on March 2, 1933, that a request was made for authority to negotiate executive trade agreements within carefully guarded limits. In this message the President emphasized the critical state of international affairs and of domestic conditions in the United States. 24 He pointed out that he asked for authority to negotiate trade agreements as an emergency measure because of the "startling" decline of world trade, entailing far-reaching unemployment at home, and because of the need for speedy action on the part of the United States government in altering trade terms to match quick action by foreign governments. He stated that executives of most foreign governments already had authority to negotiate reciprocal trade agreements, and that if the United States were not to have its trade superseded, it would have to be in a position to act in a timely fashion. THE AMENDMENT

TO THE TARIFF

ACT OF 1930

The same day, the administration bill was introduced into the House of Representatives. In the hearings 2r' before the House Ways and Means Committee, the men who presented the administration's case held that international and national conditions made executive 20

Department of State, Press Releases, Dec. 23, 1933, pp. 359-60. Ibid-., N o v . 25, 1933, p. 283. New York Times, Jan. 4, 1934, 2: 6. A press dispatch of Dec. 30, 1933 (ibid., 3: 1), indicated the administration's interest in tariff legislation, perhaps in the form of reciprocal tariff arrangements. - 4 73d Cong., 2d sess., Hou. Doc. no. 273, "Message from the President of the United States Transmitting a Request to Authorize the Executive to Enter into Executive Commercial Agreements with Foreign Nations." - 5 Hou. of Reps., Committee on Ways and Means, Reciprocal Trade Agreements, Hearings on H.R. 8430. 73d Cong., 2d sess. 21

10

A D O P T I O N OF A P R O G R A M

authority absolutely necessary." 0 The opposition maintained that protection was essential, especially in view of the domestic recovery legislation. The majority report of the Ways and Means Committee favored the bill, but the minority report, opposing the bill, was strong. 27 The latter report contained twenty-four objections to the bill. Important among these were claims of the unconstitutional delegation of taxing power, the nonexistence of a precedent for the bill, and the "sacrificing" of certain domestic industries to the trade agreements program with the consequent injection of an additional unstabilizing element into a very unstable domestic situation. The minority further stated that in their opinion foreign countries would have the advantage in bargaining, because for the most part their rates were already padded for trading purposes. Another objection was that the bill greatly overemphasized the importance of our export trade, which amounted approximately to only one-tenth of the domestic production of movable goods in 1929 and to one-seventeenth of the national income. The minority report maintained that the bilateral concession method would further stir up tariff wars, retaliation, and discrimination against our goods in foreign markets. Consequently, the minority suggested using some methods, which they considered constitutional, to expand our foreign trade if that were desired, such as the use of penalty duties against free-list products to obtain foreign concessions. Reduction of the American tariff, they believed, would only irritate the "unhappy" domestic situation. The bill as originally introduced into the House had been known as H.R. 8430, but after modification, as the result of debate, it became known as H.R. 8687. The main changes in the bill were the excepting 20 Assistant Secretary of State, F. B. Say re, before the Committee on Ways and Means of the House of Representatives in the course of hearings on H. J. Res. 96, stated that foreign countries had entered into sixty-nine bargaining agreements pertaining to customs treatment in the fourteen-month period before Congressional consideration of trade agreements. In hearings before the Senate Finance Committee, Secretary of State Hull remarked: "Nations are not disposed to take the time and trouble to negotiate trade agreements with any country which is unable to place such agreements in operation without unreasonable or uncertain delay." Senate Committee on Finance, Hearings on H.R. 8687. 73d Cong., 2d sess., p. 7. See also Tariff Commission, Regulation of Tariffs in Foreign Countries by Administrative Action, Memorandum and Summary Tabulation. March, 1934. 27 "Minority Report of the Ways and Means Committee," Congressional Record, 73d Cong., 2d sess., L X X V I I I (Part 5), 5532.

ADOPTION

OF A

PROGRAM

11

of Cuban preferential treatment from the provisions of the new sections, 28 the setting up of a definite time limit (three years) for the duration of the proposed act,21' and the inclusion of a special section stating that nothing in the act should give authority for canceling or reducing war debts. so The House passed the bill March 29, 1934. :il More debate took place on the bill in the Senate than in the House. The bill was further changed by the Senate so that the Amendment : i 2 as passed differed from the House bill in certain respects. In the Amendment, for instance, more detailed mention of Cuba and of the nonapplication of bonded warehousing provisions to countries not granting exclusive preferential duties to the United States on flour was made.:!:i A section was added providing that that part of the Tariff Act of 1930 applying to the filing of complaints upon classification or rate of duty should not apply to imports under the new Amendment. 34 A very important section, added by the Senate Finance Committee, was concerned with the public announcement of intention to negotiate trade agreements, so that interested individuals could present their views to the President or to his designated agencies; and with the seeking of information by the President, pursuant to concluding an agreement, from the United States Tariff Commission, the Departments of State, Agriculture, and Commerce, and any other sources which he might deem appropriate.""' The Senate also changed the section stating that the provisions of the act should terminate three years from its enactment to the statement that the President's authority to enter into foreign trade agreements should terminate within three years. The Amendment to the Tariff Act of 1930 was approved June 12, 1934. The main provisions of the Amendment were, in brief: (1) A delegation of power to the President to make foreign trade agreements and to modify existing duties by as much as 50-percent increase or decrease without transferring commodities between the dutiable and the free list. This authority was granted for the purpose of expanding American export trade, in an a t t e m p t to alleviate the current economic depression and the u n f o r t u n a t e consequences of that emergency; -,R The original bill, H.R. 8430, made no mention of Cuba. H.R. 8430 set no stipulated time when the act should terminate. 31 '"•H fU H X a H l-H H H H z CJ tó w O •j u w Z t-t Q

O z
CJ w U

^ OJ 2te o .tä ¿ S !

J- O CJ T J C : - T*H ^ Û fl « ^ rt o 3 4J •{— Ih _ CJ fc.EW

Netherlands

Belgium 525

525

450

450

375

375

300

300

225

225

150

150

75

75 '36

'36

'39

525

450

450

375

375

300

300

225

225

150

ISO

75

75 '37

'38

'39

450

375

375

300

300

225

225

150

150

75

75 '37

0

'36

1934-

Ca n o d a

525

37

38

France

450

375

375

300

300

225

225

150

ISO

75

75 '36

'36

O

'39

1934-

CHART UNITED

36

525

450

1934-35

C o I ombi a

525

450

'36

'39

1934-35

Brazil

525

'39

Switzerland

Sweden 523

'36

'36

'37

'36

SELECTED

YEARS,

(Unit:

Source: Assembled and computed the Trade Agreements Program," of Commerce, "Results under the Commerce

'38

'39

V

S T A T E S E X P O R T S TO I N D I V I D U A L T R A D E IN

'37

1934

TO

AGREEMENT

COUNTRIES

1939

$1,000,000)

on the basis of data obtained in 1937 "Results under Commerce Reports, February 12, 1938; Department Reciprocal Trade Agreements Program during 1939," Reports, February 17, 1940.

EFFECT

OF

AGREEMENTS

UPON

FOREIGN

TRADE

91

tries can be ascertained by analyzing trade statistics from the point of view of the agreement countries. A few illustrative cases are preTABLE PERCENT o r

16

TOTAL IMPORTS INTO TRADE AGREEMENT

S U P P L I E D BY T H E U N I T E D STATES,*

1 9 3 4 TO

Country

1934

1935

1936

1937

1938

Cuba Belgium f Haiti J Sweden Brazil Canada Netherlands fl Switzerland Honduras § Colombia Guatemala France |j Nicaragua Finland Salvador Costa Rica

56.16 7.29 48.39 11.77 23.61 56.49 6.73 5.37 70.17 43.90 40.84 7.47 58.79 8.62 44.68 47.94

58.33 7.57 48.38 12.79 23.28 56.64 7.50 5.53 64.55 41.40 32.92 6.91 50.10 9.75 38.41 34.34

64.42 6.93 56.46 12.92 22.15 58.19 7.32 5.68 66.51 41.29 33.91 8.09 46.24 9.49 38.63 38.98

68.57 8.75 50.98 13.99 23.12 60.64 9.65 7.02 58.04 48.33 36.26 8.11 54.27 9.27 40.38 42.51

79.89 11.28 54.34 16.26 24.21 62.67 12.95 7.89 61.99 51.25 44.69 9.52 59.77 10.38 46.78 49.13

COUNTRIES 1938

Agreement Effectiv e:

Sept. 3, May 1, June 3, Aug. 5, Jan. 1, Jan. 1, Feb. 1, Feb. 15, March 2, May 20, June 15, June 15, Oct. 1, Nov. 2, May 31, Aug. 2,

1934 1935 1935 1935 1936 1936 1936 1936 1936 1936 1936 1936 1936 1936 1937 1937

Source: "United States Increases Its Share in Trade of Trade-Agreement Countries," Commerce Reports, Feb. 10, 1940. * Based on foreign countries' statistics, t And Luxemburg, t Fiscal year Oct. 1-Sept. 30. H Includes colonies. § Fiscal year Aug. 1-July 31.

sented, to indicate how changes in imports into the agreement countries from the United States have compared with importations into the agreement countries from all other nations. 18 During the period 1934 to 1938 the share of Canadian imports supplied by the United States gradually increased, while that supplied by the United Kingdom and countries outside the British Empire decreased proportionately. Total imports into Honduras were valued at $8,723,000 in 1936 and at $10,387,000 in 1937. Although the dollar value of commodities 18 A recent study has shown that the percentage of the total imports into sixteen agreement countries, as a group, furnished by Germany, did not increase so much between 1936 and 1938 as the percentage furnished by the United States. See A. J. Hutzler, "Trade Increases under Reciprocal Agreements Program Surpass Other Systems," Commerce Reports, April 22, 1939.

92

EFFECT

OF

AGREEMENTS TABLE

CANADA:

UPON

FOREIGN

TRADE

17

PERCENTAGE DISTRIBUTION OF IMPORTS BY PRINCIPAL COUNTRIES I N SELECTED YEARS, 1 9 3 4 TO

1938

Country

1934

1936

1937

1938

1939

United States United Kingdom Other British Empire Other Countries Total

54.9 24.2 8.2 12.7 100.0

56.8 20.9 10.7 11.6 100.0

58.6 19.3 10.2 11.9 100.0

61.0 18.2 11.0 9.8 100.0

62.7 17.6 9.9 9.8 100.0

Source: Department of Trade and Commerce, D o m i n i o n Bureau of Statistics, Canada Yearbook, 1938, 1940.

sent by the United States to Honduras in 1937 was greater than that sent in 1936, the share of total imports into Honduras furnished by the United States was 66.4 percent in 1936 and only 58.0 percent in 1937. In 1938 our share was 61.9 percent. Total imports into Brazil were valued at 4,268,667 contos in 1936; they had been only 2,502,785 contos in 1934. Brazilian imports from us were greater in terms of dollar value in 1936 than in 1934, but we did not supply so large a share of total Brazilian imports in 1936 as in 1934. The percentage of the total furnished in 1936 was 22.2 percent; that furnished in 1934 had been 23.6 percent of the total. 10 The United States share was 23.1 percent in 1937 and 24.2 percent in 1938. The proportion of total Netherlands imports furnished by the United States was 6.7 percent in 1934-35. The percentage increased to 7.2 in 1936, to 8.8 in 1937, and to 10.8 in 1938. The percentage of total imports from other countries decreased correspondingly. 20 The proportion of total imports into Switzerland furnished by us has also increased during the period in which the trade agreement with that country has been in effect. In 1934-35, 5.4 percent of total Swiss imports were furnished by the United States. The percentage rose to 5.7 in 1936; to 7.02 in 1937; and to 7.89 in 1938. 21 Foreign trade statistics furnished by twenty nonagreement coun19 Brazil: "Foreign Trade of Brazil for 1936," P a n American Union, 1937. "Foreign Trade Series," no. 161. 20 Statistics are for the Netherlands proper. "Large Increase in United States Trade with the Netherlands under the Reciprocal Trade Agreement," Department of State, April 30, 1938. 21 "Large Increase in United States Trade with Switzerland under the Reciprocal Trade Agreement," Department of State, M a y 2, 1938.

EFFECT

OF

AGREEMENTS

UPON

FOREIGN

TRADE

93

tries also show that the percentage of imports into these countries furnished by the United States between 1934 and 1938 increased, TABLE

18

P E R C E N T OF TOTAL IMPORTS INTO NONAGREEMENT SUPPLIED BY T H E

Country United Kingdom f Japan Germany J Argentina Union South Africa Russia Australia fl Mexico Italy Venezuela f China India § Ireland Denmark Chile New Zealand Norway Peru Egypt Turkey f

COUNTRIES

U N I T E D STATES. , 1 9 3 4 TO 1 9 3 8 *

1934

1935 11.6

1936 11.0

1937

11.2

11.1

1938 12.8

34.2

33.0

30.7

33.6

34.4

8.4

5.8

5.5

5.2

7.4

14.8

14.4

14.6

16.4

17.7

16.9

17.8

19.7

20.6

19.0

7.7

12.2

15.5

18.2

28.9

13.6

15.7

17.1

14.7

15.9

60.6

66.7

59.5

62.7

57.7

12.5

11.3

14.8

11.0

11.8

45.1

44.3

47.4

52.8

56.1

26.2

19.0

19.6

19.8

17.0

6.7

6.6

6.7

6.4

7.4

4.8

6.3

7.7

6.6

11.4

6.1

5.3

5.3

5.2

8.0

28.8

27.1

25.4

29.1

27.7

12.0

12.5

12.7

12.4

12.4

8.6

8.2

8.4

8.5

10.0

26.9

32.9

32.0

35.3

34.3

4.1

5.2

5.7

5.6

6.6

4.3

7.0

9.7

15.1

10.5

Source: "United States Increases Its Share in Trade of Trade-Agreement Countries," Commerce Reports, Feb. 10, 1940. * Based on statistics of foreign countries. t Trade agreement did not come into operation until 1939; therefore from 1934 to 1938 this was a nonagreement country. J Old Germany. H Fiscal year July 1-June 30. § Included Burma before 1938.

while that furnished by other countries as a group decreased. The increase in imports, however, was not so great as that into the sixteen agreement countries with which trade agreements became effective before 1938. Imports.—A study of the import trade of the United States in the years 1936 to 1939 shows that the value of our import trade has been greater in each of these years than the average value for the years 1934-35. But imports from agreement and nonagreement countries

94

EFFECT

OF A G R E E M E N T S

UPON

FOREIGN

TRADE

TABLE 1 9 PERCENT OF IMPORTS INTO SIXTEEN TRADE AGREEMENT COUNTRIES AND INTO TWENTY NONAGREEMENT COUNTRIES FROM THE UNITED STATES AND FROM OTHER COUNTRIES, 1 9 3 4 TO 1 9 3 8 PERCENT OF

PERCENT OF

IMPORTS INTO SIXTEEN AGREEMENT COUNTRIES *

IMPORTS INTO TWENTY NONAGREEMENT COUNTRIES f

From, United States

Other

From Countries

From United States

Other

From Countries

1934

13.96

86.04

13.2

1935

14.86

85.14

13.0

86.8 87.0

1936

15.91

84.09

13.2

86.8

1937

17.70

82.30

13.5

86.5

1938

19.70

80.30

14.5

85.5

Source: "United States Increases Its Share in Trade of Trade-Agreement Countries," Commerce Reports, Feb. 10, 1940. * Includes the sixteen countries with which trade agreements became effective before Jan. 1, 1938. t Includes the twenty most important countries (in order of importance from standpoint of 1938 exports from the United States) with which trade agreements were not effective before Jan. 1, 1938.

have revealed mixed tendencies. In some years imports from the former have increased more than imports from the latter, and vice versa. A careful analysis of trade statistics indicates that the change in imports during these years was not the same for all agreement countries. Our imports from some agreement countries showed a decided change, while our imports from others changed but slightly. More specific information as to what changes have taken place in commodity imports from agreement countries can be ascertained by analyzing trade statistics from the point of view of the agreement countries. A few illustrative cases are presented, to indicate how changes in exports from the agreement countries to the United States have compared with exports from the agreement countries to all other nations. During the period in which the first Canadian agreement was in force (1936-38), the United States took a greater share of total Canadian exports than it had taken in 1934. At the same time, the percentage of total exports taken by the United Kingdom decreased. Total exports from Honduras were valued at $9,215,000 in 1936

EFFECT OF AGREEMENTS UPON FOREIGN TRADE TABLE

95

20

U N I T E D STATES IMPORTS FOR C O N S U M P T I O N FROM T R A D E A G R E E M E N T A N D N O N A G R E E M E N T C O U N T R I E S I N SELECTED Y E A R S ,

Imports

Average 1934-35

from:

1936

1937

$1,000,000) 1,023.0 f 1,217.8 i

1 9 3 4 TO

1939

1938

1939

892.5 *

1,387 IF

A. VALUE ( U N I T :

Agreement countries Nonagreement countries Total

793.9 * 1,057.4 1,851.3

1,399.0 2,422.0

B. PERCENTAGE OF TOTAL

Agreement countries Nonagreement countries Total

42.9 * 57.1 100.0

42.2 f 57.8 100.0

1,068.0 1,960.5

1,866.2 3,084.0

931 2,318

IMPORTS

39.5$ 60.5 100.0

45.5 * 54.5 100.0

59.9 fl 40.1 100.0

C. PERCENTAGE CHANGE §

Agreement countries Nonagreement countries Total

1936 over 1934-35

1937 over 1934-35

1938 over 1937

1938-39 over 1934-35

+33.2 f +29.2 +30.8

+57.3$ +73.3 +66.6

—28.9* —41.6 —36.4

+21.6* +12.5 +15.6

Source: Assembled and computed on the basis of data obtained in Department of Commerce, Foreign Commerce and Navigation of the United States, 1934 to 1937; "Results under the Reciprocal Trade Agreements Program during 1939," Commerce Reports, Feb. 17, 1940. * Includes seventeen countries with which agreements were effective in 1938 with the exclusion of Ecuador. Czechoslovakia is the seventeenth country. t Includes fourteen countries with which agreements were effective in 1936: Cuba, Belgium, Haiti, Sweden, Brazil, Canada, the Netherlands, Switzerland, Honduras, Colombia, Guatemala, France, Nicaragua, and Finland. + Includes sixteen countries with which agreements were effective in 1937. Costa Rica and Salvador are added to the list of countries in note above. U Includes eighteen countries with which agreements were effective in 1939. The United Kingdom is the eighteenth country. The agreement with Czechoslovakia was terminated in 1939. § In the computation of percentage changes, imports from the fourteen agreement countries in 1936 are compared with imports from these same fourteen countries in 1934-3S; imports from the sixteen agreement countries in 1937 are compared with imports from these same sixteen countries in 1934-35; imports from the seventeen agreement countries in 1938 are compared with imports from these same seventeen countries in 1934-35. For statistics of imports from individual trade agreement countries see Table 21.

and at $9,641,000 in 1937. The value of imports into the United States from Honduras increased from $7,519,000 in 1936 to $8,563,000 in 1937. The United States received a larger share of total Honduran

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EFFECT

OF A G R E E M E N T S

UPON

FOREIGN

TRADE

105

A comparison of imports into Switzerland from the United States in the years 1936 and 1937 with the average value of imports for the years 1934-35 reveals that imports of concession and non-concession products from the United States in 1936 declined by approximately the same percentage and in 1937 increased by approximately the same percentage. A breakdown of the concession group shows that imports of products upon which reductions in duty were granted decreased less than imports of similar products from other countries. Although imports of products upon which increased quotas were granted did not increase in 1936, they did so in 1937, when imports of similar products from other countries continued to show a decline, in comparison with 1934-35. Evidently, in the latter year the agreement secured more favorable quota treatment for the United States and in both years it served as a stop-loss device which improved our position in Swiss trade, in relation to the position of other countries. Imports.—This section of the analysis closes with a brief survey of TABLE

29

PERCENT OF TOTAL IMPORTS INTO THE UNITED STATES SUPPLIED BY TRADE AGREEMENT COUNTRIES, 1 9 3 4 TO 1 9 3 8

Agreement Effective: Sept. 3, 1934 May 1, 1 9 3 5 June 3, 1935 Aug. 5, 1 9 3 5 Jan. 1, 1 9 3 6 Jan. 1, 1 9 3 6 Feb. 1, 1 9 3 6 Feb. 15,1936

March 2, 1936 May 2 0 , 1 9 3 6 June 15, 1936 June 15, 1936 Oct. 1, 1 9 3 6 Nov. 2, 1 9 3 6 May 3 1 , 1 9 3 7 Aug. 2 , 1 9 3 7

Country Cuba Belgium * Haiti f Sweden Brazil Canada Netherlands |f Switzerland Honduras $ Colombia Guatemala France fl Nicaragua Finland Salvador Costa Rica

1934

1935

1936

1937

4.81

5.46

5.35

4.88

5.41

1.62

1.93

2.42

2.46

2.16

0.07

0.06

0.08

0.10

0.15

2.08

2.02

1.99

1.95

2.31

5.62

4.87

4.24

3.97

5.01

13.89

14.03

15.56

13.10

13.16

4.87

5.10

5.66

6.38

6.26

0.93

0.79

0.86

0.87

1.17

0.48

0.31

0.25

0.19

0.29

1938

2.87

2.45

1.77

1.74

2.53

0.28

0.30

0.35

0.32

0.49

3.85

3.37

3.22

3.04

3.62

0.10

0.13

0.08

0.10

0.13

0.55

0.60

0.63

0.58

0.93

0.15

0.24

0.21

0.28

0.29

0.13

0.15

0.14

0.15

0.21

Source: "United States Increases Its Share in Trade of Trade-Agreement Countries," Commerce Reports, Feb. 10, 1940. * And Luxemburg. f Fiscal year, Oct. 1-Sept. 30. J Fiscal year, Aug. 1 - J u l y 31. K Includes colonies.

106

EFFECT

OF

AGREEMENTS

UPON

FOREIGN

TRADE

imports from agreement countries given in Table 29. A few cases are presented to indicate how our imports from these countries of agreement and nonagreement commodities have changed since the respective trade agreements have become effective. A comparison of American imports from Canada in the year 1936 with the imports in 1935 reveals the following facts. An increase of 79.6 percent appeared in the importation from Canada of commodities upon which duties were reduced in the agreement with that country. Imports of nonagreement commodities increased 51.8 percent. Imports of commodities upon which tariff treatment was bound increased 15.2 percent. Business-cycle movements probably accounted for the fact that imports in all commodity classifications increased. The trade agreement was apparently responsible for the greater-thanaverage increase in the importation of commodities upon which duties were reduced. TABLE

30

U N I T E D STATES IMPORTS FOR CONSUMPTION FROM CANADA OF COMMODITIES INCLUDED IN THE TRADE AGREEMENT WITH CANADA, 1 9 3 5 AND

Imports

oj:

Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Special commodities * Other commodities f Total

1935 (Unit: 37.3 141.4 67.9 24.3 15.1 286.0

1936

1936 $1,000,000) 67.0 162.9 103.1 21.4 23.1 377.5

Percentage Change 1935 over 1936

+ 79.6 + 15.2 +51.8 — 11.9 + 53.0 +32.0

Source: Department of State, "Analysis of Canadian-American Trade during the First Year under the Reciprocal Trade Agreement," M a y 28, 1937. • I n c l u d e s articles, the growth or produce of the United States, returned; household furniture, wearing apparel, and so forth, not merchandise; products imported under bond, for processing and reexport. t Predominantly nonagreement commodities, but including some agreement items for which no comparable data are available, because of changes in statistical classifications.

American imports from Canada declined in 1938, as compared with 1937. Canadian domestic exports (including gold bullion other than monetary) to the United States dropped from $470,181,046 in 1937 to $345,911,915 in 1938. The importation into the United States

E F F E C T OF A G R E E M E N T S UPON FOREIGN T R A D E

107

of commodities upon which concessions were granted participated in the decline. Trade data for Guatemala, Haiti, and Honduras show that imports of commodities upon which the duties were reduced in the agreements with these countries and imports of commodities upon which tariff treatment was bound decreased in 1938, as compared with 1937. Imports of nonagreement products (small in value) increased appreciably. 27 Imports from Colombia of commodities upon which duties were reduced in the agreement with that country increased in 1938, as compared with 1937; this item was also small. Imports of commodities upon which tariff treatment was bound decreased slightly, while that of nonagreement products decreased substantially. 27 Imports from Brazil of products upon which duties were reduced in the agreement with that country dropped 33.4 percent in 1938, as compared with 1937, and that of products upon which tariff treatment was bound 12.2 percent. The decline in the imports of nonagreement TABLE

31

U N I T E D STATES IMPORTS FOR CONSUMPTION OF COMMODITIES IN THE TRADE AGREEMENT WITH BRAZIL, 1 9 3 7 AND

Imported by United States from: Brazil Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

1937 1938 (Unit: $1,000,000)

INCLUDED

1938

Percentage Change 1938 over 1937

7.2

4.8

—33.4

93.3

81.9

— 12.2

19.0

11.0

—42.1

119.5

97.7

— 18.2

8.0

4.6

—42.6

123.5

85.9

—30.4

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, Brazil, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and Brazil. 27 Haiti, Guatemala, Honduras, Colombia. United States Tariff Commission, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938."

108

EFFECT

OF

AGREEMENTS

UPON

FOREIGN

TRADE

products was very large, 42.1 percent. Imports of these products from other nations showed a drastic decline. The importation from Finland of nonagreement products and of commodities upon which the tariff treatment was bound in the agreement with that country increased 16.7 percent and 4.2 percent respectively in 1938, as compared with 1937; imports of products upon which duties were reduced (small in value) decreased 31.8 percent. Imports of these products from nations other than Finland declined noticeably. 2S The decline in imports from Sweden of products upon which duties were reduced in the agreement with that country was 31.7 percent, comparing 1938 with 1937; that of products upon which tariff treatment was bound was 24.3 percent; and that of nonagreement products only 13.6 percent. Imports of these products from nations other than Sweden declined. TABLE

32

U N I T E D STATES IMPORTS FOR C O N S U M P T I O N OF COMMODITIES INCLUDED I N T H E TRADE AGREEMENT W I T H SWEDEN, 1 9 3 7 AND 1 9 3 8

Imported by United States jrom:

Sweden Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

1937

(Unit:

1938

Percentage Change 1938 over 1937

$1,000,000)

6.3

4.3

—31.7

40.4

30.6

—24.3

11.8

10.2

— 13.6

58.5

45.1

—22.9

2.5

2.0

—20.0

26.1

19.4

—25.7

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, Sweden, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and Sweden.

In 1938 imports from Belgium of products upon which duties were reduced in the agreement with that country declined 30.5 percent, as 28 United States Tariff Commission, Finland, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938."

EFFECT

OF AGREEMENTS

UPON

FOREIGN

TRADE

109

compared with 1937. The decline in imports of products upon which the duty was bound was 42.5 percent and that upon nonagreement products 46.2 percent. Imports of these same products from other nations decreased. TABLE

33

U N I T E D STATES IMPORTS FOR CONSUMPTION OF COMMODITIES INCLUDED IN THE TRADE AGREEMENT WITH BELGIUM, 1 9 3 7 AND 1 9 3 8 Imported United

States

Percentage

by from:

1937

(Unit: Belgium Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

1938

1938

Change

over

1937

$1,000,000)

12.8

8.9

-30.5

4.0

2.3

—42.5

57.3

30.8

—46.2

74.1

42.0

—43.3

10.1

6.3

-37.6

6.1

6.0

—

1.6

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, Belgium, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and Belgium.

The decline in 1938, as compared with 1937, in imports from the Netherlands of products upon which duties were reduced in the agreement with that country was 17.1 percent. The decline in imports upon which the duty was bound was 31.8 percent, and that of nonagreement products 38.7 percent. Imports of these products from other nations dropped drastically. The decrease in the imports from France in 1938, as compared with 1937, of products upon which duties were reduced in the agreement was 17.2 percent; that of products upon which the duty was bound 9.1 percent (this item was of small value) ; and that of nonagreement products 31.4 percent. Imports of these products from nations other than France also declined. Imports from Switzerland of commodities upon which duties were reduced in the agreement declined 16.3 percent, comparing 1938 with 1937. Imports of nonagreement products declined 1.6 percent; this

110

EFFECT OF AGREEMENTS UPON FOREIGN T R A D E TABLE 3 4

UNITED STATES IMPORTS FOR CONSUMPTION OF COMMODITIES INCLUDED IN THE TRADE AGREEMENT WITH THE NETHERLANDS, 1937 AND 1938 Imported by United States jrom:

1937

1938

Percentage 1938 over

Change 1937

(Unit: $1,000,000) Netherlands Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

10.S 34.9 146.3 191.7

8.7 23.8 89.6 122.1

—17.1 —31.8 —38.7 —36.3

4.7 19.6

2.3 12.6

— 51.1 —35.7

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, the Netherlands, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and the Netherlands. TABLE 3 5 UNITED STATES IMPORTS FOR CONSUMPTION OF COMMODITIES INCLUDED IN THE TRADE AGREEMENT WITH FRANCE, 1937 AND 1 9 3 8 Imported by United States jrom:

1937

1938

Percentage 1938 over

Change 1937

(Unit: $1,000,000) France Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

26.4 0.44 50.3 77.14

21.9 0.4 34.5 56.8

—17.2 — 9.1 —31.4 —26.4

13.6 0.138

10.4 0.097

—23.5 —29.7

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, France, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and France.

EFFECT

OF AGREEMENTS

UPON

FOREIGN

TRADE

111

was accounted for in part by the fact that imports of nonagreement items on the free list (small in value) increased slightly over SO percent. Imports of products upon which tariff treatment was bound decreased 10.5 percent. TABLE

36

UNITED STATES IMPORTS FOR CONSUMPTION OF COMMODITIES INCLUDED IN THE TRADE AGREEMENT WITH SWITZERLAND, 1 9 3 7 AND Imported United

States

1938

Percentage

by from:

1937

(Unit: Switzerland Agreement commodities Duties reduced Tariff status bound Nonagreement commodities Total Other countries Agreement commodities Duties reduced * Tariff status bound *

1938

1938

Change

over

1937

$1,000,000)

17.8

14.9

— 16.3

1.9

1.7

— 10.5

6.3

6.2

—

26.0

22.8

1.6

— 12.3

7.6

7.4

—

0.12

0.16

+33.3

2.6

Source: Assembled and computed on the basis of data obtained in United States Tariff Commission, Switzerland, "Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938." * United States imports from all other countries of commodities included in the trade agreement between the United States and Switzerland.

SUMMARY

An evaluation of the net effect of the reciprocal trade agreements program upon the foreign trade of the United States has been made in the preceding section. Statistical measures were used in the evaluation, the limitations being clearly recognized. The extreme shortness of the time and the lack of certain essential trade data made any statements tentative. A statistical measurement was undertaken, to determine changes in the share of world export and import trade transacted by the United States. It was found that the share of world trade in which we participated increased during the period. Changes in the proportion of the total foreign trade of the United States, conducted with agreement and nonagreement countries, were emphasized. It was indicated that there seems to be a tendency for trade with agreement countries and

112 EFFECT OF AGREEMENTS UPON FOREIGN TRADE nonagreement countries to move in the same general direction; when trade with both groups has increased, however, trade with agreement countries has usually increased more than trade with nonagreement countries, and vice versa. In some cases that share of the total trade of an agreement country transacted with the United States has increased, while the share transacted with other countries has decreased. A final statistical device was used to measure changes of trade, in concession and non-concession commodities, with trade agreement countries. When, during the period, the value of United States trade with a particular agreement country increased, trade in concession commodities at times increased more than trade in non-concession commodities, although this was not always the case. When the value of our trade with a particular agreement country decreased, trade in concession commodities usually decreased less than that in nonconcession products. The difficulty of isolating factors motivating these changes in the foreign trade of the United States was emphasized. The modification of general business conditions was undoubtedly influential during the entire period. Factors such as the possibility of war and the existence of a drought in the United States were also significant. It was assumed that when any change in trade could not be attributed definitely to a factor other than duty reductions, the change probably was due to duty reductions. When trade in concession products increased more than trade in non-concession products (or decreased less than trade in non-concession products), when the United States share of the total trade which any agreement country transacted increased, or when our share in world trade increased, the reciprocal trade agreements program was probably responsible for the change. Further analysis revealed that the program did not initiate any startling increase in export or import trade. Perhaps one reason has been that, in some instances, enough significant items were not selected for concession treatment to affect appreciably trade between the two countries, and another that, in certain cases, large enough concessions were not granted on products to alter the price to the consumer sufficiently to change trade in these products. The granting of significant concessions has been restricted by the unsettled economic conditions which were prevalent at the time the agreements were negotiated. In some cases even reductions amounting to SO percent were

EFFECT OF AGREEMENTS UPON FOREIGN TRADE

113

not substantial enough to change deeply grooved channels of trade. The change in the tariff policy of the United States in 1934 was closely connected with the problems which arose during the postWorld War period. The new policy was designed to reduce the trade barriers which sprang up after the war, or, failing in that, at least to discourage the growth of new barriers. A policy of unilateral freer trade could not have secured immediate reduction of foreign barriers. Increased protectionist measures would have added to the restrictions on international commerce. A bargaining policy seemed, however, to provide the flexibility necessary for making timely adjustment in accord with current economic conditions, and to protect the position of the United States by necessitating the granting of concessions only when concessions of definite benefit were received in return. One must reach the conclusion that not a great deal has been accomplished during the six years the program has been in effect. Pressing international problems have not been solved. Trade barriers have continued. T h e international "hot money" problem has remained. Gold flows have been erratic. Currencies have not been stabilized. Currency manipulation and trade barriers have continued to compete for dominance, with the competition enlivened by the growth of barter systems and the problems of war. Domestic recovery in various nations of the world has not appeared. I t is apparent that the reciprocal trade agreements program has not produced any spectacular change in trade. T h e program has, however, affected substantially the foreign trade of the United States. I t has liberalized the movement of goods by removing some trade barriers, even though the positive amount of liberalization has not been great. It is significant to note, in addition, that although the United States has perhaps not positively gained much trade thereby, the program may have had the negative effect of preventing further drastic reductions in trade. In recent years the United States had been suffering from discriminatory tariff treatment. T h e reciprocal trade agreements have helped to remove some of the discrimination. I t is impossible to measure statistically the extent or the effect of the removal, but it is reasonable to conclude that the United States has enjoyed a gain in trade, as compared to the volume of trade that would have been transacted if there had been no trade agreements program. As a stop-loss device, the program has been important.

APPENDIX I T Y P E S OF M O S T - F A V O R E D - N A T I O N IN

FORCE

UNITED

JANUARY,

STATES

AND

I94O,

TREATMENT

BETWEEN

FOREIGN

THE

COUNTRIES1

A. Treaties containing unconditional most-favored-nation clause. B. Executive agreements containing unconditional most-favored-nation clause. C. Reciprocal trade agreements, signed under the Trade Agreements Act of 1934 containing the unconditional most-favored-nation clause: BelgoLuxemburg Economic Union; Brazil; Canada; Colombia; Costa Rica; Czechoslovakia; Ecuador; Finland; France; Guatemala; Haiti; Honduras; Netherlands; Nicaragua; Salvador; Sweden; Switzerland; Turkey; United Kingdom; Venezuela. D. Treaties containing conditional most-favored-nation clause.-' 1 See Hearings before the Committee on Ways and Means, House of Reps. 76th Cong., 3d sess. on H. J. Res. 407, I, 613-14, for a complete list of countries in each of these classifications. - "In accordance with a provision of the Trade Agreements Act of 1934, which gives effect to the unconditional most-favored-nation principle, the United States extends the benefits of concessions granted in trade agreements to all countries which do not discriminate against the trade of the United States, regardless of the nature or existence of obligations to extend most-favored-nation treatment to them."

APPENDIX VALUES

OF F O R E I G N

Country

Monetary

Unit

MONETARY

Value in Terms of UnitedStates Money

Argentine Republic

Peso

Australia

Pound

8.2397

Belgium

Belga

0.1695

Bolivia

Boliviano

0.6180

Brazil

Mil reis

0.0606

British H o n d u r a s Bulgaria

Dollar Lev

1.6931 0.0122

Canada

Dollar

1.6931

Chile

Peso

0.2060

China

Yuan

H o n g Kong

Dollar

II

$1.6335

UNITS, I 9 4 O *

Remarks Given valuation is of gold peso. P a p e r nominally convertible a t 44 percent of face value. Conversion suspended Dec. 16, 1929. Control of gold stocks and exports authorized Dec. 17, 1929. By decree of M a r c h 31, 1936. One belga equals 5 Belgian francs. Conversion of notes into gold suspended Sept. 23, 1931. Based upon official rate for milreis in terms of the dollar, as announced by the B a n k of Brazil. Conversion of Stabilization-Office notes into gold suspended N o v . 22, 1930. Conversion of notes suspended. Exchange control established Oct. 15, 1931. E m b a r g o on export of gold, Oct. 19, 1931; redemption of Dominion notes in gold suspended April 10, 1933. Given valuation is of gold peso. Gold pesos are received for conversion a t the rate of 4 paper pesos f o r one gold peso. Conversion of notes suspended J u l y 30, 1931. Silver standard abandoned by decree of N o v . 3, 1935; b a n k notes made legal tender u n der Currency Board control; exchange rate f o r British currency primarily fixed at a b o u t Is. 2Vzd., or a b o u t 29% cents, United States, per y u a n . T r e a s u r y notes a n d notes of the three banks of issue made legal tender b y silver

FOREIGN MONETARY

Country

Monetary

Colombia

Peso

Costa Rica

Colon

Cuba

Peso Koruna Krone

Czechoslovakia Denmark

Unit

Value in Terms of UnitedStales Money

117

UNITS

Remarks

nationalization ordinance of Dec. 5, 1935; exchange fund created to control exchange rate. 0.5714 Obligation to sell gold suspended Sept. 24, 1931. New gold content of 0.56424 grams of gold %o fine established by monetary law of Nov. 19, 1938, effective Nov. 30, 1938. 0.7879 Conversion of notes into gold suspended Sept. 18, 1914; exchange control established J a n . 16, 1932. 1.0000 By law of May 25, 1934. 0.4537

Dominican Republic

Dollar

1.6931

Ecuador

Sucre

0.3386

Egypt

Pound (100 piasters)

8.3692

Estonia

Kroon

0.4537

Finland

Markka

0.0426

France

Franc

Germany

Reichsmark

0.4033

Great Britain

Pound Sterling

8.2397

Greece

Drachma

0.0220

Guatemala

Quetzal

1.6931

Haiti

Gourde

0.2000

Honduras

Lempira

0.8466

....

Conversion of notes into gold suspended Sept. 29, 1931. United States money is principal circulating medium. Conversion of notes into gold suspended Feb. 9, 1932. Conversion of notes into gold suspended Sept. 21, 1931. Conversion of notes into gold suspended June 28, 1933. Conversion of notes into gold suspended Oct. 12, 1931. Provisions of monetary law of Oct. 1, 1936, providing for gold content of franc, superseded by decree of June 30, 1937, which stated that the gold content of the franc shall be fixed ultimately by a decree adopted by the Council of Ministers. Until issuance of such decree a stabilization fund shall regulate the relationship between the franc and foreign currencies. Exchange control established July 13, 1931. Obligation to sell gold at legal monetarv par suspended Sept. 21, 1931. Conversion of notes into gold suspended April 26, 1932. Conversion of notes into gold suspended March 6, 1933. National bank notes redeemable on demand in United States dollars. Gold exports prohibited March 27, 1931; lempira circulates as equivalent of half of United States dollar.

118

Country Hungary

FOREIGN MONETARY

Monetary Pengo

Unit

UNITS

Value in Terms of United States Money 0.2961

India [British]

Rupee

0.6180

Indo-China

Piaster

Ireland

Pound

8.2397

Italy

Lira

0.0526

Japan

Yen

0.8440

Latvia

Lat

....

Liberia

Dollar

1.6931

Lithuania

Litas

0.1693

Mexico

Peso

Netherlands and colonics

Guilder (florin)

0.6806

Newfoundland

Dollar

1.6931

New Zealand

Pound

8.2397

Nicaragua

Cordoba

1.6933

Norway

Krone

0.4537

Panama

Balboa

1.0000

Paraguay

Peso (Argentine)

1.6335

Persia ( I r a n )

Rial

0.0824

Peru

Sol

0.4740

Remarks

Exchange control established J u l y 17, 1931. Obligation to sell gold a t legal m o n e t a r y par suspended Sept. 21, 1931. Piaster pegged to French franc a t the rate of 1 piaster = 10 French francs; conversion of notes into gold suspended Oct. 2, 1936. Conversion of notes into gold suspended Sept. 21, 1931. New gold content of 46.77 milligrams of fine gold per lira established by m o n e t a r y law of Oct. 5, 1936. E m b a r g o on gold exports Dec. 13, 1931. Currency pegged to sterling Sept. 28, 1936, a t 2,522 lati =

£100.

British money is the principal circulating medium. Free export of gold suspended Oct. 1, 1935. Decree of Aug. 28, 1936, left the monetary unit, the peso, to be later defined by law. Suspension of convertibility of notes into gold a n d restrictions placed on free gold exports Sept. 26, 1936; gold export prohibition repealed b y decree J u n e 28, 1938; prohibition restored by Act of Nov. 25, 1938. N e w f o u n d l a n d and Canadian notes legal tender. Conversion of notes into gold suspended and export of gold restricted, Aug. 5, 1914; exchange regulations Dec. 1931. E m b a r g o on gold exports N o v . 13, 1931. Conversion of notes into gold suspended Sept. 29, 1931. United States money is principal circulating medium. P a r a g u a y a n paper currency is used; exchange control established J u n e 28, 1932. Obligation to pay out gold deferred March 13, 1932; exchange control established March 1, 1936. Conversion of notes into gold suspended M a y 18, 1932.

FOREIGN MONETARY

Country

Monetary

Unit

Value in Terms of United States Money

Philippine Islands

Peso

0.5000

Poland

Zloty

0.1899

Portugal

Escudo

0.0749

Rumania

Leu

0.0101

Salvador

Colon

0.8466

Spain Straits Settlements

Peseta Dollar

0.9613

Sweden

Krona

0.4537

Switzerland

Franc

Thailand (Siam)

B a h t (Tical)

0.7491

Turkey

Piaster

0.0744

Union of South Africa

Pound

8.2397

Union of Soviet Republics Chervonetz Peso Uruguay

UNITS

8.7123 0.6S83

Venezuela

Bolivar

0.3267

Yugoslavia

Dinar

0.0298

119

Remarks

By act approved March 16, 1935. Exchange control established April 27, 1936. Gold exchange standard suspended Dec. 31, 1931. Exchange control established M a y 18, 1932. Conversion of notes into gold suspended Oct. 7, 1931. British pound sterling a n d Straits dollar and half dollar legal tender. Conversion of notes into gold suspended Sept. 29, 1931. Order of Federal Council, enacted Sept. 27, 1936, instructed the Swiss National B a n k to maintain the gold parity of the f r a n c at a value ranging between 190 and 215 milligrams of fine gold. Conversion of notes into gold suspended M a y 11, 1932. 100 piasters equal to the T u r k ish p o u n d ; conversion of notes into gold suspended 1916; exchange control established Feb. 26, 1930. Conversion of notes into gold suspended Dec. 28, 1932. Conversion of notes into gold suspended Aug. 2, 1914; exchange control established Sept. 7, 1931. N e w gold content of 0.585018 grams of pure gold per peso established by m o n e t a r y law of J a n . 12, 1938. Exchange control established Dec. 12, 1936. Exchange control established Oct. 7, 1931.

Source: United States Treasury D e p a r t m e n t Quarterly Circular, July 1, 1940. • A t p a r as regards gold units; nongold units have no fixed par with gold.

APPENDIX PUBLIC

ACTS

AND

III

RESOLUTIONS

(PUBLIC—No. 316—73D CONGRESS) (H.R. 8687) AN ACT To amend the Tariff Act of 1930. BE I T ENACTED BY T H E SENATE AND H O U S E OF REPRESENTATIVES OF T H E U N I T E D STATES OF AMERICA I N CONGRESS ASSEMBLED, T H A T T H E

TARIFF

ACT OF 1 9 3 0 IS AMENDED BY ADDING AT T H E E N D OF T I T L E I I I T H E F O L LOWING: "PART III

PROMOTION

OF FOREIGN

TRADE

"SEC. 350. (a) For the purpose of expanding foreign markets for the products of the United States (as a means of assisting in the present emergency in restoring the American standard of living, in overcoming domestic unemployment and the present economic depression, in increasing the purchasing power of the American public, and in establishing and maintaining a better relationship among various branches of American agriculture, industry, mining, and commerce) by regulating the admission of foreign goods into the United States in accordance with the characteristics and needs of various branches of American production so that foreign markets will be made available to those branches of American production which require and are capable of developing such outlets by affording corresponding market opportunities for foreign products in the L : nited States, the President, whenever he finds as a fact that any existing duties or other import restrictions of the United States or any foreign country are unduly burdening and restricting the foreign trade of the United States and that the purpose above declared will be promoted by the means hereinafter specified, is authorized from time to time— " ( 1 ) To enter into foreign trade agreements with foreign governments or instrumentalities thereof; and " ( 2 ) To proclaim such modifications of existing duties and other import restrictions, or such additional import restrictions, or such continuance, and for such minimum periods, of existing customs or excise treatment of any article by foreign trade agreements, as are required or appropriate to carry out any foreign trade agreement that the President has entered into hereunder. No proclamation shall be made increasing or decreasing by more than SO per centum any existing rate of duty or transferring any article

PUBLIC ACTS AND RESOLUTIONS

121

between the dutiable and free lists. The proclaimed duties and other import restrictions shall apply to articles the growth, produce, or manufacture of all foreign countries, whether imported directly or indirectly: PROVIDED, That the President may suspend the application to articles the growth, produce, or manufacture of any country because of its discriminatory treatment of American commerce or because of other acts or policies which in his opinion tend to defeat the purposes set forth in this section; and the proclaimed duties and other import restrictions shall be in effect from and after such time as is specified in the proclamation. The President may at any time terminate any such proclamation in whole or in part. " ( b ) Nothing in this section shall be construed to prevent the application, with respect to rates of duty established under this section pursuant to agreements with countries other than Cuba, of the provisions of the treaty of commercial reciprocity concluded between the United States and the Republic of Cuba on December 11, 1902, or to preclude giving effect to an exclusive agreement with Cuba concluded under this section, modifying the existing preferential customs treatment of any article the growth, produce, or manufacture of Cuba: PROVIDED, T h a t the duties payable on such an article shall in no case be increased or decreased by more than SO per centum of the duties now payable thereon. " ( c ) As used in this section, the term 'duties and other import restrictions' includes (1) rate and form of import duties and classification of articles, and (2) limitations, prohibitions, charges, and exactions other than duties, imposed on importation or imposed for the regulation of imports." SEC. 2. (a) Subparagraph (d) of paragraph 369, the last sentence of paragraph 1402, and the provisos to paragraphs 371, 401, 1650, 1687, and 1803 (1) of the Tariff Act of 1930 are repealed. The provisions of sections 336 and 516 (b) of the Tariff Act of 1930 shall not apply to any article with respect to the importation of which into the United States a foreign trade agreement has been concluded pursuant to this Act, or to any provision of any such agreement. The third paragraph of section 311 of the Tariff Act of 1930 shall apply to any agreement concluded pursuant to this Act to the extent.only that such agreement assures to the United States a rate of duty on wheat flour, produced in the United States which is preferential in respect to the lowest rate of duty imposed by the country with which such agreement has been concluded on like flour produced in any other country; and upon the withdrawal of wheat flour from bonded manufacturing warehouses for exportation to the country with which such agreement has been concluded, there shall be levied, collected, and paid on the imported wheat used, a duty equal to the amount of such assured preference. (b) Every foreign trade agreement concluded pursuant to this Act shall be subject to termination, upon due notice to the foreign government concerned, at the end of not more than three years from the date on which

122

PUBLIC ACTS AND

RESOLUTIONS

the agreement comes into force, and, if not then terminated, shall be subject to termination thereafter upon not more than six months' notice. (c) The authority of the President to enter into foreign trade agreements under Section 1 of this Act shall terminate on the expiration of three years from the date of the enactment of this Act. SEC. 3. Nothing in this Act shall be construed to give any authority to cancel or reduce, in any manner, any of the indebtedness of any foreign country to the United States. SEC. 4. Before any foreign trade agreement is concluded with any foreign government or instrumentality thereof under the provisions of this Act, reasonable public notice of the intention to negotiate an agreement with such government or instrumentality shall be given in order that any interested person may have an opportunity to present his views to the President, or to such agency as the President may designate, under such rules and regulations as the President may prescribe; and before concluding such agreement the President shall seek information and advice with respect thereto from the United States Tariff Commission, the Departments of State, Agriculture, and Commerce and from such other sources as he may deem appropriate. Approved, June 12, 1934, 9:15 p. M. (PUBLIC R E S O L U T I O N — No. 1 0 — 7 5 t h CONGRESS) ( C H A P T E R 22 — 1st SESSION) (H. J. Res. 96) JOINT RESOLUTION To extend the authority of the President under section 350 of the Tariff Act of 1930, as amended. Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, T h a t the period during which the President is authorized to enter into foreign-trade agreements under section 350 of the Tariff Act of 1930, as amended by the Act (Public, Numbered 316, Seventy-third Congress) approved June 12, 1934, is hereby extended for a further period of three years from June 12, 1937. Approved March 1, 1937. (PUBLIC RESOLUTION — No. 61 — 76th CONGRESS) ( C H A P T E R 96 — 3 d SESSION) (H. J. Res. 407) J O I N T RESOLUTION To extend the authority of the President under section 350 of the Tariff Act of 1930, as amended. Resolved by the Senate and House of Representatives of the United

PUBLIC ACTS AND

RESOLUTIONS

123

States of America in Congress assembled, T h a t the period during which the President is authorized to enter into foreign-trade agreements under section 350 of the Tariff Act of 1930, as amended by the Act (Public, Numbered 316, Seventy-third Congress) approved June 12, 1934, is hereby extended for a further period of three years from June 12, 1940. Approved, April 12, 1940.

A P P E N D I X IV TRADE

Country Cuba * Brazil Belgium f Haiti Sweden Colombia Canada Ì Honduras Netherlands Switzerland If Nicaragua § Guatemala France Finland Costa Rica Salvador Czechoslovakia ** Ecuador f t United Kingdom Canada t f Turkey Venezuela flfl

AGREEMENTS

Date Signed Aug. 24, 1934 Feb. 2, 1935 Feb. 27, 1935 March 28, 1935 May 25, 1935 Sept. 13, 1935 Nov. 15, 1935 Dec. 18, 1935 Dec. 20, 1935 Jan. 9, 1936 March 11, 1936 April 24, 1936 May 6, 1936 May 18, 1936 Nov. 28, 1936 Feb. 19, 1937 March 7, 1938 Aug. 6, 1938 Nov. 17, 1938 Nov. 17, 1938 April 1, 1939 Nov. 6, 1939

SIGNED

Date Effective Sept. 3, 1934 Jan. 1, 1936 May 1, 1935 June 3, 1935 Aug. 5, 1935 May 20, 1936 Jan. 1, 1936 March 2, 1936 Feb. 1, 1936 Feb. 15, 1936 Oct. 1, 1936 June 15, 1936 June 15, 1936 Nov. 2, 1936 Aug. 2, 1937 May 31, 1937 April 16, 1938 Oct. 23, 1938 Jan. 1, 1939 Jan. 1, 1939 May 5, 1939 Dec. 16, 1939

* A supplementary Cuban agreement became effective Dec. 23, 1939. Concessions granted to Cuba are not generalized through most-favored-nation treatment: the treatment accorded Cuba is preferential. t Public notice of intention to negotiate a new agreement with Belgium was issued Aug. 16, 1939. t This Canadian agreement has been superseded by the one lower in the list. H Public notice of a proposed termination, in part, of the concession on handkerchiefs granted by the United States in the trade agreement with Switzerland was issued March 29, 1940. § At the request of Nicaragua, certain provisions of the agreement between Nicaragua and the United States were terminated March 10, 1938: namely, Article I, the first paragraph of Article II, Article I I I (except insofar as it relates to note I of Schedule I of the said agreement), and Article V. The Nicaraguan government requested modification "on account of the grave emergency financial conditions," but the statement was made that "while the rate of exchange between the paper cordqba and the gold cordoba will be increased for purposes of collection of customs duties, the Government of Nicaragua

TRADE AGREEMENTS

SIGNED

125

does not in reality contemplate an increase in the basic duties specified in Schedule I," and that Nicaragua would "reopen negotiations with the Government of the United States, as soon as it is possible, for the renewal or replacement of the above-mentioned articles of the trade agreement of March 11, 1936." Department of State, Terminating Certain Provisions of the Reciprocal Trade Agreement of March 11, 1936 ("Executive Agreement Series," no. 95) between the United. States of America and Nicaragua. "Executive Agreement Series," no. 120. ** The rates of duty in the agreement with Czechoslovakia were terminated by Presidential proclamation on April 22, 1939, as a result, in the words of the Department of State press release, "of the occupation of the Czechoslovak Provinces of Bohemia, Moravia and Slovakia by the armed forces of Germany, and of the Province of Ruthenia by the armed forces of Hungary," "Proclamation by the President of the United States pertaining to Czechoslovakia." Department of State, March 23, 1939. For the press, no. 115. t t At the request of Ecuador, the United States agreed, on June 15, 1940, to the imposition of quantitative restrictions on imports into Ecuador of certain articles included in Schedule I of the trade agreement between the United States and Ecuador. This action was taken "with a view to maintaining the exchange value of the sucre." Ecuador proposed that during the next six months imports of the selected articles "from all countries be restricted to a total not in excess, on an annual basis, of 50 percent of the average annual imports of those articles during the four years 1936 to 1939, inclusive." The restrictions adopted by the Ecuadoran government were to be imposed for the first three months of the ensuing six-month period "in the form of quotas allocated to individual countries in accordance with the percentage of the imports of each restricted article which were supplied during the four years 1936-39. In the case of quotas not filled during the first three months, the unused portions" were to be distributed during the second three months among those countries which filled their quotas during the former period. Dept. of State, J u n e 15, 1940. For the press, no. 303. t t A supplementary Canadian agreement became effective J a n . 1, 1940. Total imports into the United States of silver or black fox furs and skins were limited to 100,000 units in any twelve-month period beginning Dec. 1, 1940. Import quotas were allocated "between Canada and other foreign countries on the basis of imports into the United States during the first eleven months of 1939." The import duty on silver or black fox furs and skins was reduced from 37% percent to 35 percent ad valorem. Dept. of State, Dec. 30, 1939. For the press, no. 716. This agreement was replaced by a new supplementary trade agreement with Canada, effective Dec. 20, 1940. The second supplementary agreement is substantially similar to the first. In the second, however, the quota figure of 100,000 units applies only to whole furs and skins and lower-valued live foxes. Highervalued animals are exempted from quota limitations, and separate quotas are established for parts and articles of fox furs and skins. Dept. of State, Dec. 13, 1940. For the press, no. 533. 1111 Public notice of intention to negotiate an agreement with Chile was issued Oct. 2, 1939.

APPENDIX V UNITED

STATES I9IO

FOREIGN

TO

TRADE

1939

IMPORTS FOR CONSUMPTION CALENDAR YEAR 1910 *

EXPORTS, INCLUDING REËXPORTS Total U n i t : $1,000,000 Unit: $1,000,000 1,745 1,547

Percent Dutiable 50.8

EXCESS OF EXPORTS OVER IMPORTS U n i t : $1,000,000 198

1911 *

2,049

1,528

49.2

521

1912 *

2,204

1,641

46.3

563

1913 *

2,466

1,767

44.1

699

1914*

2,365

1,906

39.6

459

1915 *

2,769

1,648

37.3

1,121

1916

5,483

2,359

31.5

3,124

1917

6,234

2,919

26.6

3,315

1918

6,149

2,952

24.5

3,197

1919

7,920

3,828

29.2

4,092

1920

8,228

5,102

38.9

3,126

1921

4,485

2,557

38.8

1,928

1922

3,832

3,074

38.6

758

1923

4,167

3,732

42.0

435

1924

4,591

3,575

40.8

1,016

1925

4,910

4,176

35.1

734

1926

4,809 4,865

4,408

34.0

401

4,163

35.6

702

4,078

34.3

1,050 902

1927 1928 1929

5,128 5,241

1930

3,843

4,339 3,114

33.2

729

1931

2,424

2,088

33.4

336

1932

1,611

1,325

33.2

286

1933

1,675

1,433

36.9

242

1934

2,133

1,636

39.4

497

1935

2,283

2,039

40.9

244

1936

2,456

2,424

1937

3,349

3,010

42.9 41.4

339

33.6

32

1938

3,094

1,950

39.3

1,144

1939

3,177

2,276

38.6

901

Source: United States Tariff Commission, " B o o k m a r k for United States I m p o r t s and T r a d e Agreement Concessions, 1931-1939." * Fiscal year ending J u n e 30.

U N I T E D STATES FOREIGN TRADE

UNITED

STATES

EXPORTS

TO T R A D E

127

AGREEMENT

COUNTRIES I929

AND

I934 PERCENTAGE OF

VALUE (UNIT:

Country Belgium Brazil Canada Colombia Costa Rica Ecuador Finland France Guatemala Haiti Honduras Netherlands Salvador Sweden Switzerland United Kingdom Turkey Venezuela

1929 114.9 108.8 948.4 49.0 8.3 6.1 14.9 265.6 11.5 8.8 12.8 128.3 8.1 58.7 12.5 848.0 5.8 45.3

$1,000,000) 1934 50.0 40.4 302.4 21.9 3.1 2.3 6.0 115.7 4.1 3.4 6.0 51.0 3.1 33.1 8.4 382.7 2.7 19.3

PERCENTAGE OF TOTAL UNITED STATES

EXPORTS

1929 2.2 2.1 17.2 0.9

1934 2.3 1.9 14.2 1.0

0.1 0.3 5.1

0.1 0.3 5.4

2.4

2.4

1.1 0.2 16.2 0.1 0.9

1.6 0.4 17.9 0.1 0.9

TOTAL IMPORTS

INTO

AGREEMENT COUNTRY

1929 9.5 30.1 67.9 45.9 48.0 40.0 12.5 12.3 57.0 70.1 * 74.5 * 9.9 52.2 14.7 9.0 16.0 6.7 55.1

1934 7.2 23.6 57.2 43.9 46.4 33.7 8.6 9.6 50.8 48.4 t 70.2 f 6.1 44.5 11.7 5.4 11.2 4.3 45.1

Source: Assembled and computed on the basis of data obtained in Department of Commerce, Foreign Commerce and Navigation of the United States, 1929, 1934; Foreign Commerce Yearbook, 1931-35. * 1929-30. t1933-34.

128

UNITED STATES FOREIGN

UNITED

STATES

IMPORTS

AGREEMENT I929

TRADE

FROM

TRADE

COUNTRIES

AND

1934 PERCENTAGE OF

VALUE

Country Belgium Brazil Canada Colombia Costa Rica Ecuador Finland France Guatemala Haiti Honduras Netherlands Salvador Sweden Switzerland United Kingdom Turkey Venezuela

(UNIT:

1929 74.0 207.7 503.S 103.5 5.2 5.8 11.2 171.5 8.5 1.4 12.8 83.9 3.8 53.0 48.4 329.8 12.2 51.2

$1,000,000)

1934 26.2 91.5 231.7 47.1 2.1 3.1 9.0 61.0 4.5 1.2 7.8 28.4 2.5 33.9 15.2 115.4 7.2 22.1

PERCENTAGE OF TOTAL UNITED STATES IMPORTS

1929 1.7 A.I 11.4 2.4

1934 1.6 5.5 14.0 2.8

0.1 0.3 3.9

0.2 0.5 3.7

1.9

1.7

1.2 1.1 7.5 0.3 1.2

2.1 0.9 7.0 0.4 1.3

TOTAL EXPORTS

FROM

AGREEMENT COUNTRY

1929 6.8 42.2 46.0 75.2 27.8 45.2 7.0 6.7 45.7 9.2 * 73.9 * 3.6 21.5 10.9 10.0 6.2 9.9 28.2

1934 4.3 39.3 34.1 65.6 27.7 44.9 6.9 4.7 33.8 8.8 t 71.7 t 3.2 26.9 9.9 5.8 4.5 10.3 16.0

Source: Assembled and computed on the basis of data obtained in Department of Commerce, Foreign Commerce and Navigation of the United States, 1929, 1934; Foreign Commerce Yearbook, 1931—35. * 1929-30. t1933-34.

BIBLIOGRAPHY S E L E C T E D R E F E R E N C E S ON OUR R E C E N T F O R E I G N TRADE AND C O M M E R C I A L POLICY

THIS BIBLIOGRAPHY is not intended to be exhaustive. A comprehensive bibliography of Bibliography the reciprocal trade agreements program, Reciprocal Trade: A Current (third edition, 1937; Supplement, 1940), is published by the United States Tariff Commission.

OFFICIAL

PUBLICATIONS

[Canada.] Department of Trade and Commerce, Dominion Bureau of Statistics, Canada Yearbook. Monthly Summary of the Trade of Canada. This report was discontinued December, 1939. Beginning with January, 1940, the title was Monthly Report of the Trade of Canada. League of Nations (Economic and Financial Section). Balances of Payments. Annual Report. The Course and Phases of the World Economic Depression, 1931. II.A.21. Enquiry into Clearing Agreements, 1935. II.B.6. Evolution of Commercial Policy since the Economic Crisis, 1934. II.B.l. International Trade Statistics. Annual Report. Monthly Bulletin of Statistics. The Most-Favored-Nation Clause. Equality of Treatment in the Present State of International Commercial Relations, 1936. II.B.9. Recommendations of the Economic Committee Relating to Tariff Policy and the Most-Favored-Nation Clause, 1933. II.B.l. Review of World Trade. Annual Report.Statistical Yearbook. World Economic Survey. Annual Report. Pan American Union. [Brazil.] "Foreign Trade of Brazil for 1936." "Foreign Trade Series," no. 161, 1937. United States Congress. Congressional Record, 73d Congress, 2d session, 1934, LXXVIII, 5693-9118, 10297-11426. Debates on enactment of the trade agreements act. Congressional Record, 75th Congress, 1st session, 1937, LXXXI, 3 2376. Debates on extension of the trade agreements act. Statutes at Large of the United States of America, Washington, 1895.

130

BIBLIOGRAPHY

United States Congress, House of Representatives. Committee on Ways and Means. Reciprocal Trade Agreements. Hearings on H.R. 8430, March 8 14, 1934. Extending Reciprocal Foreign Trade Agreement Act. Hearings on H.J.Res. 96, January 21-23, and 25-26, 1937. "Extension of Reciprocal Trade Agreements Act." Hearings on H.J. Res. 407, 76th Cong., 3d Sess., January 11-12, 15-20, 22-27, 29-31, and February 1-3, 1940. Message from the President of the United States Transmitting a Request to Authorize the Executive to Enter into Executive Commercial Agreements with Foreign Nations. 73d Cong., 2d Sess., House Doc. no. 273. United States Congress, Senate. Committee on Finance. Reciprocal Trade Agreements. Hearings on H.R. 8687, April 26-27, 30, and May 1, 1934. Committee on Finance, Extension of Reciprocal Trade Agreements Act. Hearings on H.J.Res. 407, February 26-29, March 1-2, 4-6, 1940. Extending Reciprocal Trade Agreements Act. Hearings on H.J.Res. 96, February 10-12, and 15, 1937. United States Department of Agriculture. Agriculture's Interest in America's World Trade, 1935. Annual Report of the Secretary of Agriculture. The Interest of Agriculture in Reciprocal Trade Agreements, 1934. The Significance of Agricultural Imports (published as Senate Doc. no. 263, 74th Cong., 2d Sess., 1936). World Trade Barriers in Relation to American Agriculture (published as Senate Doc. no. 70, 73d Cong., 1st Sess., 1933). United States Department of Commerce. Important American Export Products Benefiting from the Reciprocal Trade Agreements Signed up to M a y 1, 1937. Bureau of Foreign and Domestic Commerce, 1937. Analysis of Schedule I of Canadian-American Trade Agreement. Bureau of Foreign and Domestic Commerce, 1935. Annual Reports of the Secretary of Commerce. The Balance of International Payments of the United States. Annual Report. Commerce Reports. Articles on the results of the reciprocal trade agreements program appear from time to time in the weekly Reports. Foreign Commerce and Navigation of the United States. Annual Report. Foreign Commerce Yearbook. Monthly Summary of Foreign Commerce of the United States. Trade Information Bulletins. See particularly Summary of United States Trade with the World. Annual Report.

BIBLIOGRAPHY

131

Trade Promotion Series. See particularly Foreign Trade of the United States. Annual Report. World Economic Review. Annual Report. United States Department of State. Analyses of Trade Agreements. Detailed analyses of trade agreements give information pertaining to trade relations with the agreement country, a summary of the general provisions of the agreement, and an explanation of concessions obtained and granted. Announcements concerning Trade-Agreement Negotiations. In connection with negotiations for any trade agreement, a formal public notice of intention to negotiate is issued. The notice is accompanied by a list of products on which the granting of concessions may be considered. Commercial Policy Series. Various addresses on commercial and tariff policies underlying the trade agreements program appear in this series. The Trade Agreements Division issues a frequently revised "Selected List of Memoranda, Addresses and Other Material on the Reciprocal Trade-Agreements Program," which gives the topics of the most recent addresses. Department of State Bulletin. This weekly publication frequently contains analyses and other information pertaining to trade agreements. The publication was inaugurated July 1, 1939, when the weekly pamphlet Press Releases was consolidated with the monthly bulletin Treaty Information. "Executive Agreement Series." The official text of each trade agreement is published in this series. Miscellaneous Memoranda on Special Phases of the Program. Adherence by the United States to the Unconditional MostFavored-Nation Policy in Connection with the Trade-Agreements Program, n.d. Agricultural Products Affected by Concessions Obtained or Granted by the United States in the Eighteen Trade Agreements Concluded to Date, October 26, 1938. Analysis of Canadian-American Trade during the First Year under the Reciprocal Trade Agreement, May 28, 1937. Economic Necessity for Legislation Authorizing the Executive to Negotiate Bilateral Trade Agreements with Foreign Countries, June 4, 1936. How Trade Agreements are Made, n.d. Joint Statement by the Governments of the United States and Argentina, Jan. 8, 1940. Large Increase in United States Trade with the Netherlands under the Reciprocal Trade Agreement, April 30, 1938. Large Increase in United States Trade with Switzerland under the Reciprocal Trade Agreement, May 2, 1938.

132

BIBLIOGRAPHY

Method and Procedure of Presentation of Briefs to the Committee for Reciprocity Information, December 28, 1936. Quantity and Value of Canadian Imports from the United States and from All Countries of Commodities on Which Canada Granted Concessions in the Trade Agreement. Calendar Years, 1935-36. United States Department of the Treasury. Quarterly Circular. United States Federal Reserve System, Board of Governors. Federal Reserve Bulletin.

Monthly.

United States Tariff Commission. Annual Reports of the Chairman of the Tariff Commission. Digests of Trade D a t a with Respect to Products on which Concessions were Granted by the United States in Trade Agreements with Certain Countries. Agreement countries for which digests have appeared include Belgium, Brazil, Canada (first and second agreements), Czechoslovakia, Finland, the Netherlands, Sweden, Switzerland, Turkey, and the United Kingdom. Imports under Reciprocal Trade Agreements by Countries, 1937 and 1938. The countries for which such a volume has been published include Belgium, Brazil, Finland, France, Haiti (with Guatemala, Honduras, Colombia), the Netherlands, Sweden, and Switzerland. "Miscellaneous Studies" Changes in Import Duties since the Passage of the Tariff Act of 1930 (1938; Supplement, 1939). Commercial Treaties and Agreements of the United States in Force, 1936. Compilation of Data on United States Trade with Germany, 1939. Extent of Equal Tariff Treatment in Foreign Countries, 1937. Number of Concessions Made by Reciprocal Trade Agreements, 1938. Reciprocal Trade Agreements and Specified Products. The specified products are alcoholic beverages; cattle, sheep, and poultry industries; cement and concrete products; dairy products; fats, oils, waxes, and oil-bearing materials; feeds and fodders; fishery products; forest products; fruit and fruit products; glass and glassware; grain and grain products; hogs and hog products; lace and lace articles; leather; leather footwear; petroleum and petroleum products; pottery; starches and dextrines; sugar; tobacco and tobacco manufactures; vegetables and vegetable preparations; watches, clocks, and precision instruments and apparatus; woolen and worsted goods. Regulation of Tariffs in Foreign Countries by Administrative Action, Memorandum and Summary Tabulation, March, 1934. The Tariff: a Bibliography, 1934.

BIBLIOGRAPHY

133

Statistics of Imports into the United States for Consumption Comparative Statistics, Calendar Years 1931-35 inclusive, Vols. I - X I , 1936. Imports by Countries, for the Calendar Year 1929, Vols. I - I V , 1937. Imports by Countries, for the Calendar Year 1936, Vols. I - I V , 1937. United States Imports and Duties, 1937 (1938). United States Imports and Trade Agreement Concessions, 193139, Vols. I - V I I I , 1940. BOOKS, PAMPHLETS,

AND

ARTICLES

Bidwell, P. W. "Latin America, Germany, and the Hull Program," Foreign Affairs, XVII (1939), 374-90. — — " T r a d i n g with Dictators," Annals of the Academy of Political and Social Science, CIV (1939), 59-65. Bonn, M. J . The Crumbling of Empire. Allen and Unwin, London, 1938. Brockway, Tho. Battles without Bullets: the Story of Economic Warfare. Headline Book no. 18, Foreign Policy Assn., New York, 1939. Buell, R. L. The Hull T r a d e Program and the American System. World Affairs Pamphlet no. 2, Foreign Policy Assn., New York, 1938. Bunce, A. C. Economic Nationalism and the Farmer. Collegiate Press, Ames, Iowa, 1938. Carus, C. D . " T h e Hull Trade Policies with Latin America," Institute of World Affairs, Proceedings, XV (1937), 77-79. Condliffe, J. B. Markets and the Problem of Peaceful Change. International Institute of Intellectual Cooperation, Columbia University Press, New York, 1938. T h e Reconstruction of World Trade. Norton, New York, 1940. "Congress and the Reciprocal Trade Treaties," Congressional Digest, X V I I I (1939), 291-320. Culbertson, W. S. Reciprocity. McGraw-Hill, New York, 1937. Dietrich, E. B. World Trade. Holt, New York, 1939. Durand, E. D . "Measurement of Effects of Reciprocal Trade Agreements," Journal of the American Statistical Association, X X X I I (1937), 50-64. Edminster, L. R. " T r a d e Agreements and Agriculture," Journal of Farm Economics, X X (1938), 325-37. Feiler, Arthur. " T h e T r a d e Agreements Act," American Scholar, I X (1940), 133-46. Fräser, H . S. "Constitutionality of the T r a d e Agreements Act of 1934," with discussion. American Society of International Law, Proceedings, 1937, pp. 55-67; 79-94. Gersting, J. M . The Flexible Provisions in the United States' Tariff, 19221930. University of Pennsylvania Press, Philadelphia, 1932.

134

BIBLIOGRAPHY

Heilperin, M. A. The Monetary Aspect of the Raw Materials Problem and the Revival of International Trade. International Institute of Intellectual Cooperation, Columbia University Press, New York, 1938. Hull, Cordell. "Recent Developments in Foreign Trade." Radio address . . . with message of the President of the United States, Government Printing Office, Washington, 1938. Hutchins, R. M., Chairman. Report of the Commission of Inquiry into National Policy in International Economic Relations. International Economic Relations, report. University of Minnesota Press, Minneapolis, 1934. Jacquelin, D. G. Swiss-American Economic Relations. "Geneva Studies," Vol. X, nos. 4-5, Columbia University Press, New York, 1939. Part I I I of this study is an analysis of the reciprocal trade agreement between the United States and Switzerland. James, C. L. and others. Industrial Concentration and Tariffs. Temporary National Economic Committee, Monograph no. 10, 76th Cong., 3d Sess., 1940. Kramer, R. L., Editor. "Our Foreign Commerce in Peace and War," Annals of the American Academy of Political and Social Science, C C X I (1940), 1-196. Krout, J. A., Editor. "Economic Nationalism, Trade Barriers and the War," Academy of Political Science, Proceedings, X I X (1940), 1-55. Larkin, J. D., Trade Agreements. Columbia University Press, New York, 1940. Lewis, Cleona. America's Stake in International Investments. The Brookings Institution, Washington, 1938. Peek, G. N . and S. Crowther. Why Quit Our Own? Van Nostrand, New York, 1936. Peirce, P. S. "Reciprocal Trade-Executive Agreements," World Affairs Interpreter, summer, 1936. Popper, D. H. "Six Years of American Tariff Bargaining," Foreign Policy Reports, XVI (1940), 30-44. Rowe, J. W. F. Markets and Men. Macmillan, New York, 1936. Salter, Sir Arthur. Recovery: The Second Effort. Century, New York, 1932. Sayre, F. B. America Must Act. World Peace Foundation, Boston, 1936. The Way Forward: The American Trade Agreements Program. Macmillan, New York, 1939. Simonds, F. H. and B. Emeny. The Great Powers in World Politics: International Relations and Economic Nationalism. New edition. American Book Co., New York, 1939. Southard, F. A. "The Conflict of American Foreign Trade Policy with Totalitarian Policies," American Economic Review, supplement, X X X (1940), 118-19. Staley, Eugene. World Economy in Transition. Council on Foreign Relations, New York, 1939.

135

BIBLIOGRAPHY

Tasca, H. J. The Reciprocal Trade Policy of the United States. University of Pennsylvania Press, Philadelphia, 1938. Taussig, F. W. "Necessary Changes in Our Commercial Policy," Foreign Affairs, X I (1933), 397-405. Taylor, A. E. The New Deal and Foreign Trade. Macmillan, New York, 1935. Upgren, A. R. Reciprocal Trade Agreements. Day and Hour Series, no. 19. University of Minnesota Press, Minneapolis, 1937. Wallace, H. A. America Must Choose. World Peace Foundation, Boston, 1934. Whittlesey, C. R. "Import Quotas in the United States," Quarterly Journal of Economics, L I I (1937), 37-65. International Monetary Issues. McGraw-Hill, New York, 1937. Williams, B. H. Economic Foreign Policy of the United States. McGrawHill, New York, 1929. Zimmermann, E. W. World Resources and Industries. Harper, New York, 1933. SUGGESTED ECONOMIC

READINGS

ON

THE

P R O B L E M S OF T H E

INTERNATIONAL POSTWAR

PERIOD

Copeland, M. T . A Raw Commodity Revolution. Study no. 19, Harvard University Bureau of Business Research, Boston, 1938. An accumulation of technological changes has altered the production cost of basic raw commodities. At the same time the demand for these commodities has shifted. Consequently, former demand-supply-price relationships have been drastically upset. During the difficult adjustment period, numerous price control schemes have appeared. The most recent of three studies upon the international raw commodity price problem by Professor Copeland is A Raw Commodity Revolution. The main sections of this study indicate the nature of its contents: (1) technological developments in nineteen raw commodities, (2) prices, and (3) price control measures. Einzig, Paul. World Finance, 1914-1935. Macmillan, New York, 1935. During the last decade, Paul Einzig has published a number of books on various aspects of international finance. The present volume traces financial development from the outbreak of the war in 1914, when the world departed from so-called "normal" financial conditions, to 1935. Postwar inflation and deflation, war debts and reparations, the distribution of the world's gold supply, and attempts at monetary stabilization are among the topics analyzed. Hodson, H. V. Slump and Recovery: A Survey of World Economic Affairs, Oxford University Press, New York, 1938. The account of recent international economic history contained in this book is thorough. The background period of 1920-29 is carefully de-

BIBLIOGRAPHY

136

scribed, as well as the slump of 1929-31, the crisis of 1931, the succeeding world depression, and the more recent armaments boom. Several countries and commodities receive special detailed year-by-year analysis. The material first appeared as a series of articles in the (British) Survey of International

Affairs.

Jones, J. M. Tariff Retaliation. University of Pennsylvania Press, Philadelphia, 1934. This book is the result of two years of research on a fellowship abroad, during which time the author studied the reactions of foreign countries to the Hawley-Smoot Tariff. Some of the chapter headings in the book are: "Spain Withdraws Most-Favored-Nation Treatment from the United States," "Switzerland Boycotts American Products," "Canada Retaliates in Kind," "Great Britain Adopts Protection," and "The Discriminations of Austria." Dr. Jones expresses the opinion that the Act of 1930 contributed to "a serious undermining of many of the established principles and practices of the commercial policies of the majority of the nations of the world and to the substitution of new, or the revival of old principles and practices." Madden, J. T., M. Nadler, and H. C. Sauvain, America's Experience as a Creditor Nation. Prentice-Hall, New York, 1937. Foreign securities were unimportant in the American capital market before the war of 1914. During the war, however, the United States became the world's leading capital-exporting country. The era of foreign lending ended with the depression of 1930. A transfer problem, which the authors believe was in part attributable to nationalistic economic policies, developed in many debtor as well as creditor countries and increased the difficulty of making interest payments. Statistical studies are undertaken to determine (1) the extent of defaults, (2) the financial results of American lending, and (3) the rate of return, 1920 to 1935. The conclusion is reached that in spite of certain basic differences, the experience of the United States with foreign investments has been similar to that of older creditor countries; in these countries recurring periods of default have been followed by readjustment and the resumption of foreign lending. Rappard, W. E. Post-War Efforts for Freer Trade. "Geneva Studies," Vol. I X , No. 2, Columbia University Press, New York, 1938. In three Cobden Lectures delivered at the London School of Economics, Dr. Rappard has traced the history of international conferences from the founding of the League of Nations to the London Conference of 1933. Conferences held during this period included the International Financial Conference at Brussels in 1920, the Genoa Conference of 1922, the World Economic Conference of 1927, and the Monetary and Economic Conference of 1933. At each conference the advisability of removing some of the restrictions on international trade was expressed. But no conference succeeded in reducing these restrictions. In Dr. Rappard's opinion, the reason for this failure was the fear of war. He suggests that primarily

BIBLIOGRAPHY

137

because the world has not really been at peace since 1914, efforts to liberate international trade have been unsuccessful. The material benefits of freer trade have been sacrificed, he believes, to considerations of national security. Staley, E. Raw Materials in Peace and War. Council on Foreign Relations, New York, 1937. This report on raw materials and markets, as they affect peaceful change, was prepared for the Tenth International Studies Conference. After a brief survey of the conflict between national political control and international raw material needs, raw material problems occasioned by the menace of war and those under peaceful conditions are considered in detail. The close relationship between problems of trade, investment, and raw materials is noted. The author concludes that "The international raw material problem is an armaments problem. . . . Hence, so long as national power is the real issue behind political demands touching raw materials no peaceful solution is possible. The problem of 'peaceful change' as it concerns the wartime significance of raw materials . . . is to relax the grip of 'power economy' ideas on the minds of peoples and statesmen." An extended summary of raw material control schemes, by commodities, is contained in the appendix. "Symposium on the Totalitarian State from the Standpoints of History, Political Science, Economics and Sociology, Held at Philadelphia, Nov. 17,1939." American Philosophical Society, Proceedings, L X X X I I (1940), 1-102. Two articles in this symposium are of particular interest to students of international trade, namely, "The Economics of the Totalitarian States," by M. J. Bonn, and "The Relation of Totalitarianism to International Trade and Finance," by C. R. Whittlesey. Dr. Whittlesey, in his article, points out the similarity between the international economic policies of belligerent nations and those of totalitarian states; both employ prohibition of certain imports, channelizing of international transactions, and control of means of payment and shipping. In a totalitarian state, political considerations are the basis of international commercial policy. Authority is substituted for free individual choice in the determination of what is to be traded. Two possible courses for coping with totalitarian trade policy are, in the opinion of the author, open to the United States. One is to "meet the competition of totalitarian countries, whatever the cost." The other is to "let these countries go their way, hoping that the burden of selling with little regard to cost will become so great that they will voluntarily abandon it in the course of time." It is signally important, he emphasizes, for us to "keep our heads in meeting the problem before us." Tasca, H. J. World Trading Sysems. Institute of Intellectual Cooperation, Columbia University Press, New York, 1939. This monograph is one of a series concerned with the relationship of economic policy to world peace. The author divides world trading systems

138

BIBLIOGRAPHY

into regulated and unregulated systems and studies the problem of trade between the two. As illustrative cases, he analyzes American and British commercial policy toward Germany and other countries. He points out that, as the volume of trade subject to regulation has grown, application of the unconditional most-favored-nation principle has become increasingly difficult. The study dwells at length on the problem of mixed commercial policy systems. Case studies are made of techniques, such as quotas and quantitative controls, clearing and purchasing agreements, and monopoly provisions. Dr. Tasca adheres to the present American commercial policy which, he believes, realizes in part the economic doctrine of comparative advantage. Van Zeeland, Paul. Report on the Possibility of Obtaining General Reduction of the Obstacles to International Trade. Jan. 26,1938. London, Cmd. 5648, 1938. M. van Zeeland, of Belgium, was invited in 1937 by the governments of France and Great Britain to inquire into the possibility of securing a general reduction of quotas and other obstacles to international trade. The numerous statesmen whom he questioned while preparing his report apparently favored freer trade as an ideal, but hesitated to take action to secure it. The report outlines, as outstanding obstacles to international trade, the following: economic measures (tariffs, indirect protection, and quotas) and financial considerations (monetary disturbances and exchange restrictions). M. van Zeeland presents what, in his opinion, are the general conditions necessary for the successful removal of restrictions on international trade and, with recognition of the difficulties involved, gives a definite plan for such removal. He concludes that the fostering of international trade must remain an important element for national economic prosperity.

INDEX Act to A m e n d the Tariff Act of 1930, see A m e n d m e n t to Tariff Act of 1930 Ad valorem rate, 67 Agreement commodities, sec Concession products Agreement countries, analysis of t r a d e with, 86-100; dates of signing, 124; imp o r t s f r o m United States, 91; United States exports to, 86-93, 127; U n i t e d States i m p o r t s f r o m , 88, 93-99, 128 Agricultural products, concessions on, 5861, 68; use of q u o t a s in, 31 A m e n d m e n t to Tariff Act of 1930, a d m i n istration, 18-35; a d o p t i o n , 9-12, 16; provisions, 11; resolutions extending, text, 122; text, 120-22 A n t i d u m p i n g duties, 46 Argentina, 8, 62 A s - g o o d - a s - n a t i o n a l t r e a t m e n t , 42 A u t o m o t i v e vehicles, 64 Belgium, concessions, 53, 54, 56, 59, 60, 61. 62, 63, 64, 65, 71, 73; devaluation of currency, 81 ; quotas, 41 ; U n i t e d States i m p o r t s f r o m , 108 Bindings, definition, 33 ; of d u t y - f r e e ent r y , 72, 74; stop-loss measures, 64 Brazil, a p p r o a c h e d regarding trade agreements, 8 ; concessions, 60, 62, 63, 64, 69, 72 ; exports t o United States a n d elsewhere, 98; i m p o r t s f r o m United States, 92 ; United States i m p o r t s f r o m , 107 Business cycle, 79, 100, 102, 106 C a n a d a , concessions, 56, 59, 60, 61, 62, 63, 64, 68, 69, 70, 72, 73; exports t o U n i t e d States a n d elsewhere, 94, 98 ; i m p o r t s f r o m United States, concession a n d n o n concession, 101 ; i m p o r t s f r o m United States a n d elsewhere, 91 ; special p r o v i sions, 39, 43, 45; U n i t e d States i m p o r t s f r o m , concession and non-concession, 106 Capital, international flow, 1 Carpets, 72 C e n t r a l American countries, binding of free-list e n t r y , 72, 74

Cheese, 68 Chief supplier principle, effect on foreign t r a d e changes, 80; guide to negotiations, 20-24, 35, 74; most-favored-nation t r e a t m e n t a n d , 24; problems of application, 23 China, 62, 72 Collier tariff bill, 7 Colombia, a p p r o a c h e d regarding t r a d e agreements, 8 ; concessions, 59, 60, 61, 62, 63, 64, 72; United States i m p o r t s f r o m , 107 C o m m i t t e e for Reciprocity I n f o r m a t i o n , 18, 19, 20 C o m m o d i t y m o v e m e n t s , efforts to free, 2 ; p o s t w a r disturbance, 1 Complaints, s y m p a t h e t i c consideration of, 47 Concession products, analysis of t r a d e in, 99-111; U n i t e d States exports, 101-5; United States imports, 105-11 Concessions, bindings, 33, 64, 72, 74; complaints a b o u t , 74; effect of extension to t h i r d c o u n t r y , 50; kinds, 53-57, 66; on agricultural products, 58-61, 68; on exports, 53-65; on imports, 66-74; on industrial products, 63, 70; on nonagricult u r a l p r o d u c t s , 61, 69; on specialties, 67, 73, 74; quotas, 53-56, 65; significance in t r a d e relations, 67; t h r o u g h d u t y reduction, 33, 37, 51 Costa Rica, concessions, 59, 60, 61, 62, 72; special provision, 40' C o t t o n , 58 C o t t o n yarns, 25 Cuba, 68; concessions n o t generalized, 39, 124n; preferential t r e a t m e n t , 11, 12 Currency fluctuations, effect on foreign trade, 50, 80 Currency m a n i p u l a t i o n , 49, 113 C u s t o m s administration, 38, 48, 51 D e m o c r a t i c p l a t f o r m (1932) f a v o r s reciprocal agreements, 7 Domestic recovery measures, and agreem e n t provisions, 41 D r o u g h t , effect on foreign trade, 83

140

INDEX

Duties collected on United States imports, 67 Duty reductions, 33, 37, 51; see also Concessions Ecuador, concessions, 60, 61, 62, 63, 64, 72 Elasticity of demand, 76; of supply, 77 Emergency Tariff Act of 1921, 12 Exchange rates, see Foreign exchange rates Executive Commercial Policy Committee, 9 Executive trade agreements, 8, 9, 11, 16; precedents, 12-15 Export bounty, 46 Exports, of nations, decline, 3, 4 Exports, United States, see United States foreign trade Filtering paper, 25 Finland, concessions, 59, 60, 62, 68, 72; special provision, 40; United States imports from, 108 Fish, 69 Food and drug laws, 46 Foreign exchange control, effect on mostfavored-nation treatment, 43, 52 ; method, 43M Foreign exchange rates, effect of fluctuation on trade, 82; fluctuations and termination of agreements, 49 Foreign trade, see United States foreign trade France, concessions, 53, 54, 56, 59, 60, 61, 62, 63, 64, 65, 68, 69, 70, 71, 73; devaluation of currency, 81; special provisions, 40, 41, 45, 50; United States imports from, 109, 110 Free list, bindings, 53, 67; products on, 72 Fruits, 60 Generalization of concessions, 21, 39; effect on nonagreement countries, 78n Germany, 60, 62; most-favored-nation treatment withdrawn from, 21» Gloves, 71 Gold flow, 1, 113; control of, 45, 52 Gold standard, abandonment of, 2, 80>i Grains, 59 Guatemala, concessions, 59, 60, 61, 62, 64, 72; special provision, 40; United States imports from, 107 Haiti, concessions, 59, 60, 61, 62, 63, 72; special provision, 43; United States imports from, 107

Hearings, 18 Honduras, concessions, 60, 61, 62, 63, 72; exports to United States and elsewhere, 94; imports from United States, 92; special provision, 40; United States imports from, 107 Hull, Cordell, 8, 9 Imports, noncompetitive, 33 Imports, United States, see United States foreign trade Import trade, centralized control, 48; unfair methods, 12 Industrial production of United States, index, 79 Industrial products, concessions on, 63, 70 Inter-Departmental Advisory Board on Reciprocity Treaties, 8 Interdepartmental Trade Agreements Committee, 19, 20 Internal police regulations, 45, 52 Internal revenue laws, 45 Internal taxation, 42 International balance of payments, 1 International Conference of Stresa, 40 International trade, interpretation of data, 75-77; restrictive devices, 1 Iron and steel products, 63 Japan, 63 Leather, 61 London Conference, see World Economic Conference of 1933 Lumber, 69 Measurement of effects of trade agreements, 77-84, 111 Meat and meat products, 61 Metals and ores, 69 Monetary units, foreign, table of values, 116-19 Most-favored-nation treatment, affected by as-good-as-national policy, 42; chief supplier principle and, 24; conditional and unconditional, 5; factor in negotiations, 21; general provisions, 39; influence of reclassification on, 30; operation, 21 n; specific provisions, 40-44; territorial reservations under, 39; types in force, 115 Motion picture films, 57 Negotiation, announcement of intention, 11, 12, 18; problems of, 20 ff.

INDEX Netherlands, concessions, S3, 55, 57, 59, 60, 61, 62, 63, 65, 68, 69, 72 ; devaluation of currency, 80 ; exports to United States, 98 ; i m p o r t s f r o m United States, 92, 102 ; special provisions, 40, 41, 43; United States i m p o r t s f r o m , 109, 110 N e u t r a l i t y , 45 N e w f o u n d l a n d , 65 N i c a r a g u a , concessions, 61, 63, 72; special provision, 40 N o n a g r e e m e n t commodities, see N o n - c o n cession p r o d u c t s N o n a g r e e m e n t countries, analysis of t r a d e w i t h , 86-100; effect of generalization of concessions on, 78K; i m p o r t s f r o m United States, 92; United States exp o r t s to, 86-93 ; U n i t e d States i m p o r t s f r o m , 88, 93-95, 98-100 N o n a g r i c u l t u r a l p r o d u c t s , concessions on, 61, 69 Non-concession p r o d u c t s , analysis of t r a d e in, 99-111 ; United States exports, 101-5; U n i t e d States imports, 10S-11 Ores a n d metals, 69 P a n a m a , 40 P a n a m a C a n a l Zone, 39 Persia, 72 P e t r o l e u m products, 62 Philippine Islands, 61 ; territorial restrictions regarding, 39 P h o n o g r a p h records, 27 Portugal, 8 P o s t - W o r l d W a r conditions, economic, 1 ; relation t o United States tariff policy, 113 Preamble, 37, 51 President, p o w e r to consult agencies on tariff changes, 11; to negotiate t r a d e agreements, 7, 9, 11-15, 16 P r i s o n - m a d e goods, 46 Public security measures, 45 Quotas, 30, 33, 35, 4 9 ; on exports, 53-56, 65; specific provisions for, 40-42, 51 Q u o t a system, 40« Reciprocal t r a d e agreements, a d o p t i o n of p r o g r a m , 1-17; agencies, 19; agricultural products, concessions on, 58, 68; a n n o u n c e m e n t of intention to negotiate, 11, 12; chief supplier principle u n d e r , 20-24, 35; concessions on exports, 33, 53-65; concessions on imports, 33, 66-

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74; countries signing, 115, 124; effect on United States foreign trade, 75-113; exploratory studies, 8 ; factors affecting success of, 78-84, 112; f o r m , 36, 5 1 ; industrial p r o d u c t s , concessions on, 63, 70; n o n a g r i c u l t u r a l products, concessions on, 61, 69; n u m b e r negotiated, 32, 34, 124; opposition to p r o g r a m , 14, 16; procedure u n d e r p r o g r a m , 18-20, 34; q u o t a s u n d e r , 30, 35; reclassification in, 24-30, 35 ; specialties of exporting countries, 73 general provisions, 32, 36-52 ; c o m plaints, s y m p a t h e t i c consideration of, 47; concessions, 37; customs a d m i n istration, 38, 51 ; d a t e s a n d d u r a t i o n , 47; effect on p r i o r agreements, 46; m o s t - f a v o r e d - n a t i o n t r e a t m e n t , 3944, 51; objectives, 3 6 ; restrictions on application, 44-46; t e r m i n a t i o n , e m e r gency, 49-51, 52 Reciprocal T r a d e Agreements Act, see A m e n d m e n t to Tariff Act of 1930 Reciprocal t r a d e policy, development, 6-9 Reclassification, extent of use, 28; p r o cedure, 24-30, 35 Revenue Act of 1916, 12, 13 R e v e n u e duties, effect on free-list trade, 72 Roosevelt, F r a n k l i n Delano, message to Congress, 1933, 9 Russia, 69 Salvador, concessions, 60, 61, 62, 72; special provision, 40 S a n i t a r y measures, 45«, 48, 52 Schedules subject to i m p o r t concessions, 66, 74 Seasonal d u t y reductions, 31 Seeds a n d bulbs, 68 S h e r m a n A n t i - T r u s t Act, 12 Silver, control of flow, 45 South American countries, binding of free-list e n t r y , 72, 74; m a r k e t for industrial products, 63 Specialties of exporting countries, 67, 73, 74 Stabilization f u n d , 82n Statistics, inadequacy, 75-77, 111 Sweden, approached regarding trade agreements, 8 ; concessions, 59, 60, 62, 63, 73 ; special provisions, 40, 43 ; United States i m p o r t s f r o m , 108 Switzerland, concessions, 53, 55, 59, 60, 61, 62, 63, 64, 65, 68, 70, 71, 73; devaluation

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INDEX

Switzerland (Continued) of currency, 80; exports to United States, 98; imports from United States, 92, 104; special provisions, 41, SO; United States imports from, 109, 111 Tableware, 70 Tariff Act of 1930, executive power under, 13, 16; problems in modification of, 3-5, 73; reclassifications in schedules, 28 Tariff Act of 1930, Amendment to, see Amendment to Tariff Act of 1930 Tariff Acts, of 1890, 13; of 1894, 12, 13; of 1909, 13; of 1913, 13; of 1921, 12; of 1922, 12, 13, 16 Tariff policy of United States, 1, 113 Tariff reduction through trade agreements, adoption, 9-12, 16; advantages, 3-6; development of policy, 6-9; see also Reciprocal trade agreements Tariff structure, flexibility, 12-14, 30 Termination of agreements, 47, 49-51, 52 Territorial reservations, 39 Territory covered by agreement, 37, 39 Textiles, 70 Tobacco, 56, 59, 68 Tracing cloths, 22 Trade agreements, bilateral, 3, 5 Trade agreements, reciprocal, see Reciprocal trade agreements Trade restrictions, attempt to liberalize, 2 ; in postwar period, 1 ; policies for reduction, 3-6 Turkey, concessions, 62, 64, 69, 72 ; special provision, 45 Unfair practice in import trade, 46 United Kingdom colonies included, 37n, 65 concessions, 56, 57, 59, 60, 61, 62, 63, 64, 65, 68, 69, 70, 71, 72 ; cotton yarns, 25; filtering paper, 25; phonograph records, 27; tracing cloths, 22 decline in value of pound, 81

imperial preference, 33, 39, 65 special provisions, 45, 46, 47 territory covered, 37 United States adoption of reciprocal trade agreements program, 1-17 change in tariff policy, 1, 113 foreign trade, altered by reciprocal trade policy, 113; effect of agreements on, 75-113; export concessions, 53-65; factors affecting measurement, 78-84, 112; import concessions, 6674; in concession and non-concession products, 99-111; index, 79; postwar decline, 2; statistics, 126-28; with agreement and nonagreement countries, 86-99, 112 indexes of foreign trade and industrial production, 79 neutrality laws, 45 share in world trade, 84 significance of export concessions, 57-58 territorial reservations, 39 United States Congress, Amendment to Tariff Act of 1930 adopted, 11; Amendment renewed, 15, 17; attempt to liberalize foreign trade, 2, 14; discussion of tariff policies, 3-17 passim United States House of Representatives, Ways and Means Committee, 9 United States Senate, Finance Committee, 11

United States Tariff Commission, 7 Venezuela, concessions, 59, 60, 61, 62, 63, 72; special provisions, 43, 45 War debts, 11, 12 War materials, shipment, 44, 52 War threats, effect on foreign trade, 83 Watches, 51, 70 World Economic Conference, of 1927, 16; of 1933, 2, 8, 16, 49 World trade, United States' share of, 84