Ap us history Unit 8 Terms Chapter 34 Francisco Franco

Reciprocal Trade Agreements Act

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Reciprocal Trade Agreements Act – The reciprocal trade policy was the brainchild of Secretary of State Hull, who believed that trade was a two-way street, and that tariffs should be lowered. The Reciprocal Trade Agreements Act of 1934 was designed to improve American exports, and was aimed at both relief and recovery. Avoiding the dangerous uncertainties of a wholesale tariff revision, it whittled down the highest levels of the Hawley-Smoot Law by amending them. Roosevelt was allowed to lower existing rates by as much as 50%, provided that the other country involved was willing to respond with similar reductions – the resulting pacts were to become effective without the formal approval of the senate. By the end of 1939, Hull had succeeded in negotiating pacts with 21 countries. The act was a landmark piece of legislation, which broke the pattern of the traditional high-protective-tariff policy. It paved the way for the American-led free trade international economic system that took shape after WWI.

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