Discussion ECO 202
6-1 Discussion- ECO 202
In the 1960's the US was the world's leader in export goods, with strong demands in industries such as low-tech textiles and apparel to aircraft and machine tools. There was also a significant increase in agricultural good trade surplus between 196-1967 from 0.7 billion to 1.7billion, however through the end of the 60's the surplus began to fall. Chemical imports (i.e. fertilizers) picked up in the late 60's and capital goods showed a surplus in both imports and exports and remained consistent throughout the decade. Imports of consumer goods expanded during the 60's except for a slight decrease in 1961, and the deficit continued to increase from that point on.
In the early 1960's tariffs were present on a commodity by commodity basis, until the Trade Expansion Act of 1962 was passed by congress, which cut tariffs across the board using a linear approach. During the Kennedy Round, which was the first set of negotiations to address non-tariff barriers, looked to address certain trade problems. Those trade barrier issues included technical barriers such as labeling and product standards, anti-dumping policies, addressing the government procurement code and the customs valuation code. In the late 60's, specifically 1969 the US entered into voluntary restrain agreements with countries that exported steel to the US, and lasting through the early 70's.
One reason that tariff reductions were a good thing was the idea that increase free trade between countries would avoid future world wars. The anti-dumping barriers put restrictions on industrial nations from entering into trade agreements with less-developed nations eliminating the opportunity to sell goods at a below cost price. On the other hand, the non-tariff barriers maintained by many countries put the US at a substantial disadvantage and damaged our export potential. The non-tariff barriers also made negotiations difficult to predict, which resulted in making changes to existing US laws before negotiations challenging.
Canto, Victor A.(n.d). U.S. Trade Policy: History and Evidence. Retrieved from https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2011/10/cj3n3-4.pdf
Branson, William H., Junz, Helen B. (1971). Trends in US Trade and Comparative Advantage. Brookings Papers on Economic Activity. (Vol 2.). Retrieved from https://www.brookings.edu/wp-content/uploads/1971/06/1971b_bpea_branson_junz_gordon_krause.pdf