User:CHay34/Trade Expansion Act: Difference between revisions

The article as it stands is fairly lacking in content on the history of why the law was passed in the first place. The article also only has limited information of what the law does. The article also has no information on the legislative process and how the law was passed.

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To start I will add a section to the article detailing the historical context that led up to the passage of this legislation, the article currently has no background so this will be an important addition. I will also add a section detailing the provisions of the law as the current article is light on the details of the actual law. Interest groups also seemed to play a large role in the passage of the legislation so I will also add a section explaining their role and influence on the legislation.

Background

In the early 1960’s US politicians were worried about the growing influence of the European Economic Community (ECC) and the ever-present influence of the Soviet Union. President John F. Kennedydetermined that a loosening of trade restrictions would spark an increase in economic growth and keep the American economy competitive^[1]. Therefore, they began to champion a new trade act that would give the President the authority to revamp US trade policy. Republicans and some industry leaders were initially skeptical, however, and believed that a loosening of trade policy would cause significant harm to American domestic industries and workers, especially amidst a persistent unemployment issue^[2].

Provisions

The act’s stated purpose is to stimulate the US economy through the lowering of trade barriers, with a focus on countering Communist economic influence. To accomplish this goal the act granted the President a 5-year authority to reduce or increase Tariffs by a maximum of 50% the initial level. The President was also empowered to eliminate trade barriers on goods that the United States and EEC combined accounted for at least 80% of the market, with agricultural products being exempt to the 80% rule. A “Tariff Commission” would also be created that was tasked with advising the President on the economic effect of adjustments to tariff policy. The law also created the Office of the United States Trade Representative. This office would serve as the primary negotiator with foreign countries concerning trade. The President and the Tariff Commission would also be required to submit annual reports to congress on their activities under the act. Many, however, were concerned about negative impacts to domestic industries as a result of these adjustments, to soften the blow a system was created that would allow industry leaders, firms, and workers to submit petitions to the Tariff Commission for relief. In the event the Tariff Commission found that damage was done as a result of the new trade policies it would require the President to offer assistance. This could take many forms; The President could invoke the “Escape Clause” which allowed the president to rapidly raise tariffs again. The President could also provide monetary aid to businesses in the form of loans or tax-breaks. Workers could be eligible to receive unemployment aid or even retraining. Another avenue would be the imposing of international quotas to protect industries^[3].

Legislative Timeline

The act started its journey with a massive public relations campaign spearheaded by the Kennedy administration. The goal of the campaign was to frame the act as necessary in order to maintain national security. it was wildly successful, and opponents were worried that opposition to the act would be seen as hostile to US interests.

The act was officially introduced in the House on August 8th, 1961, and would remain in committee for the remainder of the year and into 1962. It passed through the House Committee on Ways and Means, and the House Committee on Rules, with the Ways and Means committee making modifications to the bill. The most important was the addition of an “Escape Clause” section. Which, In the event of economic damages, the President would be required to lower tariffs to compensate^[4]. Protectionists attempted to kill the bill on June 12th, 1962, in committee by having it recommitted, but their attempt was unsuccessful^[5]. The act was then able to pass the House on June 29th by a significant margin with no amendments made on the floor^[6].

The Senate Committee on Finance deliberated for several weeks sent the bill to the floor on September 14th. The Finance committee version was similar to the House version, but it differed in that it restored the most favored nation status of Yugoslavia and the Polish People’s Republic. This was previously added by the House as a means to combat Communist economic influence and would become a point of debate between the two branches^[7]. On the floor the legislation was subject to a lengthy amendment process before being passed by a wide margin on September 19th^[8]. Both the Senate and House agreed to a conference committee to resolve their differences. The committee agreed to strip out the provision restoring the most favored nation status for Yugoslavia and Poland and revert other changes to the House version. The Bill was then sent to Kennedy on October 4th and signed the 11th^[9].