Discussion 6-1 FOREIGN TRADE
Identify trade policies of the time:
I chose the 1960's as my decade and I have learned a many fascinating facts.
An important trade policy during the 1960’s was “The Trade Expansion Act of 1962”, the act was signed by President John F. Kennedy, on October 11, 1962. The Trade Expansion Act was designed to boost the general welfare, foreign policy, and security of the United State through international trade agreements and through modification assistance to domestic industry, agriculture, and labor, as well as for other purposes (United States Government Publishing Office, 1962). President Kennedy believed he could rouse the U.S. economy by lower tariffs between friendly nations so that everyone would benefit. He thought that by inspiring the free flow of goods we could give more to American consumers and open up domestic trade eventually leading to more jobs due to exporting (Peters & Woolley, n.d.).
What are the main goods and services the United States traded internationally?
The main goods that were internationally traded during this time period were: electronics, steel, cars and textiles. During the early 20th century manufacturing and industrialism stimulated economic growth, and mining for raw materials, as well progression in electronics (Johnston, 2012).
What trade barriers were in place during that decade?
There are three types of trade barriers : Tariffs; Non-Tariff and Quotas
Kennedy negotiated trade barriers with GATT during numerous meetings. These meetings would later become known as the Kennedy rounds (object.cato.org). The three main points he addressed were; overall reduction in tariffs, reduction in nontariff barriers, and the participation of less-develop countries (object.cato.org).
Trade barriers are limitations on international trade imposed by the government. They either levy additional costs or limits on imports and/or exports in order to protect local industries. There are three types of trade barriers: Tariffs, Non-Tariffs, and Quotas.
Tariffs are taxes that are imposed by the government on imported goods or services. Meanwhile, non-tariffs are barriers that restrict trade through measures other than the direct imposition of tariffs. And last but not least, quotas are restrictions that limit the quantity or monetary value of specific goods or services that can be imported over a certain period of time.
The nontariff barriers he addressed were;
Technical Barriers- product standards, labeling and packaging standards (object.cato.org, n.d.).
Anti-dumping Policies- selling of products in foreign markets below the manufacturing price or where the product was produced (object.cato.org, n.d.)
Government Procurement Code- opening up and regulating government procedures so other governments had access to contracts (object.cato.org, n.d.).
The Customs Valuation Codes - evaluation of products for tariffs and customs procedures (object.cato.org, n.d.).
The two pros
Consumer safety would be protected, due to product needing to pass regulations and specifications.
Manufacturers of products would receive a fair price for their product (fair market value).
The two cons
The U.S. contracts would be readily available under the Government Procurement Code; for other Countries to view. Companies doing business with the Government would have their Company profiles (accounts and earnings) be public knowledge.
The U.S. Customs Valuation Codes might cause a problem for many countries, unless all of their products meet or exceed certain criteria. Lead Paint is an example; due to health-related issues this product has very high standards for use.
Canto, V. A. (n.d.). U.S. TRADE POLICY: HISTORY AND EVIDENCE. Retrieved December 4, 2019 from https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2011/10/cj3n3-4.pdf
Johnston, L. (2012, February 22). History lessons: Understanding the decline in manufacturing | Minnesota Post. Retrieved December 4, 2019 from https://www.minnpost.com/macro-micro-minnesota/2012/02/history-lessons-understanding-decline-manufacturing
Peters, G., & Woolley, J. (n.d.). John F. Kennedy: Remarks Upon Signing the Trade Expansion Act. Retrieved December 4, 2019 from http://www.presidency.ucsb.edu/ws/?pid=8946
United States Government Publishing Office. (1962, October 11). Public Law 87.794-OCT. 11, 1962. Retrieved December 4, 2019 from https://www.gpo.gov/fdsys/pkg/STATUTE-76/pdf/STATUTE-76-Pg872.pdf
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