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Trade and the American Dream

Trade and the American Dream: A Social History of Postwar Trade Policy

Susan Ariel Aaronson
Senator William V. Roth
Robert T. Matsui
Copyright Date: 1996
Edition: 1
Pages: 264
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  • Book Info
    Trade and the American Dream
    Book Description:

    Every hour of every day Americans see, smell, taste, or hear goods and services traded between the United States and other nations. Trade issues are front-page news but most Americans know little about the potential impact of global economic interdependence on their jobs, standard of living, and quality of life.

    InTrade and the American Dream, Susan Aaronson highlights a previously ignored dimension of the United States trade policy: public understanding. Focusing on the debate over the three mechanisms designed to govern world trade -- the International Trade Organization (ITO), the General Agreement on Tarriffs and Trade (GATT), and the World Trade Organization (WTO) -- she examines how policymakers communicate and how the public comprehends trade policy.

    Since 1947 the U.S. has led global efforts to free trade, and support for freer trade policies and for an international organization to govern world trade has become dogma among policymakers, business leaders, and economists. Relaying on archival research, polling data, public documents, interviews, and Congressional testimony, Aaronson shows that the public also matters in trade policy decisions. If concerns about the implications of economic interdependence remain unaddressed, American trade policy and an international trade organization are vulnerable to a surge of populism and isolationism.

    While Americans became addicted to imported cars, radios, computers, and appliances, a growing number saw the costs of freer trade policies in the nation's slums, poverty statistics, crime rate, and unemployment figures. Concerns about freer trade policies reached a crescendo in the mid-1990s, especially as Congress debated U.S. participation in the North American Free Trade Agreement (NAFTA). Aaronson suggests ways to create greater public understanding for the GATT/WTO and international trade. If national trade policy is to play in Peoria, Americans must first understand it.

    eISBN: 978-0-8131-4919-6
    Subjects: Economics, Political Science, Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. List of Illustrations
    (pp. vii-vii)
  4. List of Tables and Figures
    (pp. viii-viii)
  5. Foreword
    (pp. ix-xii)
    William V. Roth Jr.

    Two of the most significant achievements of the 103rd Congress were the passage of legislation to approve and implement the North American Free Trade Agreement (NAFTA) and the Uruguay Round—the eighth round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT). These historic trade agreements were the subject of extensive and, at times, very polarized and divisive debate, and their final approval remained in doubt until the last few days of Congressional consideration. Ultimately, bipartisan support and strong leadership prevailed in support of both agreements.

    The NAFTA debate centered primarily on the impact on jobs...

  6. Foreword
    (pp. xiii-xvi)
    Robert T. Matsui

    As an elected Representative for the people of Sacramento for well over a decade, I have made the expansion of trade a top priority. Trade has had great benefits in terms of economic opportunity not only for the people of California, but for the country as a whole. Expansion of trade through agreements such as the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) is crucial for the continued economic growth of the United States.

    Our country has a mature economy and an aging population. The U.S. population growth rate is less than...

  7. Acknowledgments
    (pp. xvii-xviii)
  8. Introduction
    (pp. 1-12)

    Harry S Truman was a smalldDemocrat; he believed that enlightened public policy derived from the people. In 1949, he told the Shriners, “Foreign policy is not made by the decisions of the few. It is a result of the democratic process. The major decisions in our foreign policy . . . have been made on the basis of an informed public opinion and overwhelming public support.”¹ But Truman’s words to that quintessential American group did not reflect Truman administration trade policies—policies that had undergone radical change during his presidency.

    In 1947, the United States led global efforts to...

  9. 1 The Roots of Multilateral Trade Policy
    (pp. 13-22)

    Tennessean Cordell Hull was a “good old boy,” a respected member of Congress, and chairman of the national Democratic party. Like many of his southern colleagues, Hull believed high tariffs were an abomination. But Hull went further. He linked trade barriers (such as tariffs and preferences) with war, whereas “unhampered trade dovetailed with peace.” This good old boy’s disdain for high tariffs spurred him to action during his many years in Congress.¹

    Hull deserves credit as one of the fathers of the GATT, but his obsession with trade was not shared by most of his fellow Americans. As early as...

  10. 2 Linking Jobs to Trade Policy, 1939–1942
    (pp. 23-33)

    By 1939, advocates of freer trade policies could point to the trade agreements program as a modest success. The United States had increased its trade with some twenty countries without causing serious injury to any American industry. But bilateral trade agreements could not induce the rest of the world to dismantle their myriad forms of trade protection. More importantly, these agreements had little impact on the nation’s economic growth. Firms continued to fail in record numbers. Unemployment remained relatively high.¹

    Given continued economic stagnation, some State Department officials hoped to develop a more comprehensive approach to economic policy, one that...

  11. 3 Gaining Congressional Approval for Multilateral Trade Liberalization, 1943–1945
    (pp. 34-49)

    In 1943, the postwar planners were optimistic about the postwar plans. Although the war was not going well for the Allies, support for international cooperation seemed to be growing among elites. The Republicans issued the “Mackinac” resolution, urging the United States to play its proper role in postwar international cooperation.¹ It looked like Congress would extend the authority of the president under the Reciprocal Trade Agreements Act. And U.S. and British negotiators had reached agreement on the broad outlines of their plans to expand world trade

    However, by 1945, as the war moved to a close, the fervor for creating...

  12. 4 The Planners and the Public, 1943–1946
    (pp. 50-60)

    Nineteen forty-six was not a good year to propose a new international organization. Frustrated by the rising prices of necessities, Americans paid attention to the domestic economy. They were less supportive than during the war years of government planning in general and internationalist economic planning in particular. The ITO also made its debut at a time when events in Europe lessened the importance of longer-term mechanisms. Instead, such emergency mechanisms as food aid for Europe and financial aid to Britain became top priorities for government officials.

    Changes within the government also portended problems for the proposed ITO. President Truman brought...

  13. 5 Public Response to the ITO, 1946–1947
    (pp. 61-78)

    Describing the earliest proposals for an international trade organization, Clair Wilcox wrote, “The world that is pictured in these proposals is the kind of world that Americans want.”¹ But by 1946, the world pictured in these proposals was not to be. In Europe and Asia, America’s allies were struggling to revive their economies. In Asia and Latin America, nations were trying to industrialize. Many of these nations wanted to restrict imports to restore their prosperity.

    In recognition of global economic conditions, the ITO was changing too. The London Draft of the ITO Charter, the first of four international negotiations on...

  14. 6 The ITO, the GATT, and U.S. Trade Policy, 1947–1948
    (pp. 79-97)

    When the Department of State asked its outside economic consultants for advice on how to “sell” the last of its postwar economic initiatives to the American people, economist Jacob Viner did not mince words. If the State Department wanted to gain support for the ITO and the GATT, Viner warned, it “should always be aware that it has to cater to two publics—the people whose good will we may want in the other world, and its own support in this country. It must watch both of them all the time.”¹

    At first, catering to its overseas public appeared to...

  15. 7 Congressional Challenges and Public Apathy toward Trade, 1948–1949
    (pp. 98-113)

    No matter how much they desired to retreat from the world, Americans could not shirk the nation’s international responsibilities.¹ The United States had a growing list of global obligations, including feeding Europe, preventing the spread of communism, and protecting the free world. Although the American people were gradually accepting these new responsibilities, they expected their government to resolve domestic problems first.

    But the most powerful nation on earth seemed incapable of solving many of its own economic problems. Since the end of the war, the Truman administration had been bedeviled by labor upheaval, inflation, the need for jobs for veterans,...

  16. 8 Dead on Arrival: The Fate of the ITO, 1948–1951
    (pp. 114-132)

    In October 1948, members of the National Association of Manufacturers, a lobbying group of large and small industrial companies, met to discuss the ITO. Executive Curtis Calder compared the ITO, a code for global trade, with the development of a penal code in a small town: One of its citizens said he wanted to be free to commit murder on Mondays, a second said that he wanted to commit larceny on Tuesdays, and a third said he wanted to commit arson on Wednesdays and Fridays. Calder concluded that no Americans would want to live in such a town with so...

  17. 9 The Rise and Erosion of the Freer Trade Consensus and the Debate over NAFTA, 1949–1994
    (pp. 133-144)

    The American polity achieved a fragile consensus on trade policy in 1949. During the RTAA hearings, policymakers, representatives of special interests, and members of Congress concurred that America’s leadership of global efforts to reduce trade barriers could help global prosperity and prevent the spread of communism. U.S. policymakers were not very concerned about GATT’s small base of public support. Trade was not a burning issue for most Americans.¹

    By the mid-1950s, the GATT developed a special interest constituency consisting of exporters, some labor groups, internationalists, policy makers, journalists, and economists. These opinion leaders acted as a buffer between politicians and...

  18. 10 Present at the Creation of the WTO, 1986–1994
    (pp. 145-167)

    In a 1993 speech early in his presidency, Bill Clinton acknowledged own ambivalence about American leadership of global efforts to liberalize trade through the GATT. “For all the . . . opportunity in this global economy, an American cannot approach it without mixed feelings.” The president admitted that freer trade policies had led to job loss and lowered wages for some Americans, but then he argued, “Far more is at stake. For this new fabric of commerce will also shape global prosperity or the lack of it, and with it the prospects of people around the world for freedom and...

  19. Conclusion: Democracy and Economic Interdependence
    (pp. 168-176)

    The March 30, 1995, letter from Senators Bob Packwood and Daniel Patrick Moynihan to the president of the United States was brief and to the point. “We are writing to propose that the WTO establish its headquarters not in Geneva (where it will be viewed as simply a continuation of the GATT) but . . . here in Washington, D.C. Locating the WTO’s permanent headquarters in Washington would do much to . . . help build the support of the American public for its work” In this way, the United States could address the concerns about sovereignty that were at...

  20. Notes
    (pp. 177-235)
  21. Bibliography
    (pp. 236-252)
  22. Index
    (pp. 253-262)