Fairness in the World Economy

Fairness in the World Economy

US Perspectives on International Trade Relations

Americo Beviglia Zampetti

In an international context, fairness is particularly important, since only a system which is perceived by its participants as fair can command acceptance and compliance. The main focus of this study is to investigate the development of the notion of fairness in US trade policy and law as well as the impact this notion has on international trade discussions and rule-making, and especially on the formation of the multilateral trade regime.

Chapter 4: The Fairness Idea in the Development of the Multilateral Trade Regime

Americo Beviglia Zampetti

Subjects: economics and finance, international economics, politics and public policy, international relations

Extract

THE RECIPROCAL TRADE AGREEMENTS PROGRAMME As noted, before 1934, US commercial policy had been characterized by autonomous, single-column protective tariffs. Congress set duty rates unilaterally and not as a result of bargaining with other countries. The rates were generally rising, with the debate revolving around the fairness of the distribution of benefits and burdens afforded by such protection to domestic producers and consumers. But the rates applied equally to all countries (with the exception of Cuba, which received preferential treatment and a few other minor deviations). Extending equal treatment to all countries, the USA sought equal treatment in return, and, to this end, penalties could be instituted in cases of discrimination against US commerce, dumping, and other unfair trade practices. This search for reciprocity was partly construed as a matter of national and producer interests, but also in good measure as an issue of fairness between domestic and foreign competitors. The presidential election of 1932 produced a key evolution in US trade policy. With the victory of Franklin D. Roosevelt, the focus of trade policy broadened from import politics (restricting imports through tariff legislation) to include decisively export politics, with a focus on opening up foreign markets. The process already had started in previous years, but the new administration brought it to full fruition. Part of the reason for the refocusing was the emergency situation of the depression, which had drastically reduced US foreign trade, but, more structurally, it was related to the consolidation of the USA as a continentally...

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