In lieu of an abstract, here is a brief excerpt of the content:

101 4 THE EUROPEAN ECONOMIC COMMUNITY, DISCRIMINATION, AND TRANSATLANTIC TRADE RELATIONS, 1958–1963 Ending a period in which it had pursued largely protectionist trade policies, the United States undertook two major initiatives to obtain lower foreign trade barriers in the late 1950s and early 1960s. First, in 1958 Congress passed the Reciprocal Trade Agreements Act of 1958 that provided the president with increased powers to engage in trade negotiations. The administration used this authority to engage in the Dillon round (1960–62) of GATT negotiations that led to some reciprocal tariff reductions on industrial goods. Second, and even more important , in 1962 Congress passed a major trade bill called the Trade Expansion Act (TEA), which allowed the president to cut U.S. tariffs linearly—rather than following the item-by-item procedure required before—by as much as 50 percent in a reciprocal agreement. Moreover, it enabled the president to negotiate the reduction to zero of tariffs on a large range of products in case of the United Kingdom’s accession to the newly created EEC (1957). Using this authority, the United States engaged in the Kennedy round (1964–67), which resulted in the most far-reaching tariff reductions up to that time. Compared to the tightly circumscribed trade bills of the early 1950s, the RTAA of 1958 and the TEA of 1962 signify a major change in U.S. trade orientation . As pointed out by Raymond A. Bauer, Ithiel de Sola Pool, and Lewis A. Dexter (1972, 77) in a classic book about U.S. trade policy, the TEA represented “the most significant turn in American trade policy in thirty years.” Nevertheless, U.S. trade liberalization in the 1960s has so far attracted little research by political scientists. Most studies of U.S. trade policies overlook this renewed shift toward liberalization that took place in the late 1950s. In 102 CHAPTER 4 fact, many existing theories of U.S. trade liberalization find it difficult to account for the TEA, as they put a lot of emphasis on the institutional changes introduced by the RTAA of 1934. By contrast, the protection-for-exporters argument , as I show in this chapter, can offer a plausible explanation of the developments in the late 1950s and early 1960s. The mobilization of exporters in response to the discrimination caused by the creation of the EEC, in this view, goes a far way in explaining the increase in tariff-cutting authority contained in the two bills. In making this argument, I take issue with a series of potential rival explanations . From an institutionalist perspective, Susanne Lohmann and Sharyn O’Halloran (1994) suggest that unified government allowed for the far-reaching delegation of trade authority to the U.S. president contained in the TEA. As I show in this chapter, however, the TEA was only a continuation of a process started in the RTAA of 1958 that was passed by a Democratic Congress for a Republican president. Equally, an explanation based on geopolitical considerations (Verdier 1994; Eckes 1995) has difficulties in accounting both for the timing of the U.S. shift in trade orientation and the form that this shift took. Since the cold war was at its peak in the 1950s, if security considerations are important in shaping trade policy, the U.S. should have given most trade concessions to its European allies in that decade. In the 1960s, by contrast, the easing of tensions with the Soviet Union and the rising economic power of the EEC and Japan (Keohane 1984, 197–200) should have made the United States more cautious with regard to trade liberalization. The main explanation for the European acceptance of trade liberalization in the 1960s has been that the delegation of trade-policy authority to a supranational entity, namely the European Commission, increased decision makers’ autonomy from protectionist pressures (Meunier 2005, 8–9; Woolcock 2005, 247). Following this “collusive delegation argument,” decision makers used an institutional change to overcome opposition from domestic interests to trade liberalization. The empirical evidence, however, reveals that the trade policies implemented by the EEC were tightly in line with the demands voiced by societal actors. The protection-for-exporters argument provides an alternative interpretation that calls attention to the boost in bargaining power that the member governments of the EEC experienced after the creation of this trading arrangement. The discrimination generated by the EEC made foreign countries eager to safeguard their exporters’ access to European markets. The EEC, consequently, could gain disproportionate concessions from excluded countries...

Share