gress itself is empowered by the Constitution to regulate foreign commerce
and to shape the tariff.
Nevertheless, despite the delegation of power to the President in
1922, Congress itself again wrote a
tariff law in 1929-30. This was called
the Hawley-Smoot Tariff but officially
was known as the Tariff Act of 1930.
It is still the basic law. That was the
last time, twenty-five years ago, that
Congress itself overhauled the tariff
In 1934 the so-called Reciprocal
Trade Agreements Act was passed,
amending the 1930 Act by empowering the President to enter into foreign
trade agreements under which tariff
rates might be raised or lowered by as
much as 50 per cent. The principle of
reciprocity, though not mentioned in
the Act itself, became the ostensible
guide of the Department of State in
negotiating reduction of our tariff
rates as a means of reducing trade
barriers to our exports to other countries.
Some twenty-nine individual or bilateral agreements were made with
other countries by 1945. Thereafter
the multilateral system was introduced and under it the General Agreement on Tariffs and Trade, known as
GATT, was negotiated in Geneva in
1947. Subsequently three more tariff-
cutting conferences have been held
and we have another one coming up
early this year. By this time our tariff
has been reduced a full 75 per cent
during the twenty-one years since
The relinquishment by Congress of
direct tariff-making functions (with
minor exceptions) and the delegation
of power to the President, as just described, took place during the same
twenty-one year period.
U. S. OR UN IN CONTROL
Today, however, a new departure is
proposed. This would not be a relinquishment by Congress of its authority through delegation to the executive, but would represent a virtual
abdication by Congress and the shift
of control over our tariff to an international body.
In 1955 the State Department nego
tiated a new agreement. This 1S!
agreement to set up what is to
called the Organization for Trade"
operation or OTC. The new org*
tion would be an agency of the Utf
Nations, and it would be dedicate"
the attainment of the purposes J
objectives of the General Agrc
on Tariffs and Trade (GATT),
it would administer. It would a(*
plish this through an Assembly, \,|l](.|
Executive Committee and a Seer* ti()I|
General. The United Stat,
have one vote. . deW.
A bill has already been introd* T£
into Congress to approve U. S. ",• ously
bership in the OTC. It is II. B-J si,,,,',,.,
and will come up during this se* dear ,
of Congress. , •' men
This proposal marks a radi<*. | )„
parture from control by (Jon
tariffs and trade. It repr,-'" (,'K.
double delegation of authority' Cvil
from Congress to the Presidents Liti,,,,
OTC. Jt would in practice
gress out of its constitutional j*ment;
and responsibility, and tin
the power of the electoral,
""' "lent 1
mine the direction of public aK 'm'tit ]
this field. In short, the prop"**!, "'"" c
precipitated a crisis in dem"° '"' "ist
in the three multilateral trade negotiations that have been undertaken
since 1947. (2) It sets down in its
general provisions trade rules to
guide the conduct of international
trade among the member countries.
These trade rules are designed to
protect the lower tariff rates that
have been agreed upon by prohibiting the use of certain practices that
would impair the benefits of those
rates. (3) It provides a forum for
discussion and voluntary settlement
of international trade problems and
Recognition of the need for such a
multilateral agreement arose out of
the experience of the I'. S. and other
countries in the '30's in concluding
bilateral trade agreements. By the beginning of the postwar period it had
become clear to most countries that
there were inherent limitations in the
bilateral approach which would make
difficult or impossible any further real
progress in reducing world trade barriers.
There were several kinds of limita
tions in the bilateral approach. In the
first place, when a country engages in
a purely bilateral agreement, it is usually not prepared to make concessions
of major importance because to do so
would seriously reduce its bargaining
power in subsequent negotiations
with other countries. This is so because under the most-favored-nation
principle, which most nations follow,
any rate reduction made to one country must be extended automatically,
and for nothing, to all its trading partners. It became apparent that only
under a system of multilateral negotiation, where many countries were
prepared to grant concessions simultaneously, could a given country expect to get enough in return to make
significant concessions on its part
Secondly, bilateral negotiations
tended to be carried on in a sporadic
and piecemeal fashion. A tariff concession was usually made on an item
in negotiation with a country which
was the principal supplier of that
item. The result was that no country
could have any confidence that tariffs
on products of which it was a secondary supplier (and therefore not a
primary negotiator) would be reduced
hroiigh negotiations bet^e^^'t
principal traders. The inulti".t] CJ>
.,1 li.rl .
prtuujiw unci>, i.n I jniose
simultaneous negotiations u» JTK
GATT have gone far to h^cossio,
the most important products ° ja\\ _.
country would be treated son1 tcumstti
in the multilateral negotiatinI*J|clause"
thus all countries would '/lie pr,
benefit of the concessions Kjfo the
For example, the U. S. ha
negotiated within the Genera1 Taf ^
ment concessions with ea,
other parties benefiting soine yrtent
cent of U. S. exports. aiii"l"1,ivliieh
1953 to 0,7 billion dollars. In "guards
we got the advantage ol c""Sr'<'i,t
resulting from negotiations ^"ntei
other countries affecting s
of our exports or 1.3 bilH"" *at ;|
in 1953. bif°"1('
Thirdly, there was little sulfate S(
the rates established under t^ucl, ,
era! system. . . . Countries <$, Q'^ co,
jov concessions thev recch1'. V ""'*;
tlie most-favored-nation p''" ,»'tl <'"11
... i .... ,i ..-..ini! 1 'the
as long as the negotiating jfe r F
countries kept to their ''"',, ■,'!' '
d enjovment of SjJT ,s r
; depended on V »'
only two coU'i'V "'e ■
er which other countries, '
ntrol. Under the Genera1 ,s
Facts Forum News, /•'<''"'"'