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131 5 THE FIRST ENLARGEMENT OF THE EUROPEAN COMMUNITY AND THE U.S. REACTION Most existing accounts of transatlantic trade relations in the 1970s are motivated by one of two puzzles: the “mercantilist” orientation of these trade policies as compared to the more liberal policies in the previous decade, or the maintenance of a principally liberal stance in the face of adverse developments. On the one hand, some authors stress that the 1970s were a decade in which the United States and the EC pursued trade policies characterized by sectoral protectionism and mercantilist competition (Bergsten 1971). In the United States, the administration negotiated voluntary export restrictions with foreign countries, such as for steel imports from Japan and the EC in December 1968, and threatened the imposition of quotas, such as in the textile sector, to satisfy import competitors. Similarly, the EC protected some import-competing interests in sectors such as agriculture, steel, and textiles. For the case of the United States, I. M. Destler (2005, 65–71) explains these policies as a result of the breakdown of the committee system in the House of Representatives, which made the U.S. political system more open to interestgroup influence. With Congress no longer protected from constituency pressures , it felt obliged to implement trade policies that were more in line with industry pressures. Others emphasize the erosion of the separation between trade policy and foreign policy, which had been achieved by establishing an international trade regime after World War II, as the main cause of the shift in U.S. trade policies (Cooper 1973). Lastly, studies that call attention to the role of a hegemonic power in providing an open international trading system contend that the decline of U.S. hegemony made American trade policies 132 CHAPTER 5 more vulnerable to particular interests (Krasner 1976 and 1979; Keohane 1980; Gilpin 1987). For the case of Europe, existing studies refer to mounting competition from Japan and the newly industrializing countries, combined with increasing unemployment and a recession in the aftermath of the 1973 oil crisis as reasons for the shift toward greater protectionism in that decade (Farrands 1979; Strange 1979; Tsoukalis and da Silva Ferreira 1980; Page 1981; Dolan 1983; Schuknecht 1992). In addition, the European version of the “new protectionism” of the 1970s may have been a reaction to changes in attitudes concerning the role that governments should play in the economy, leading to the victory of the welfare state over the market economy (Krauss 1979). On the other hand, for other authors the most puzzling aspect of the trade policies of the United States and the EC in the 1970s is their continued adherence to liberal principles,even in the face of the adverse factors just mentioned.Indeed, both trading entities agreed on trade liberalization in the Tokyo round of multilateral trade negotiations. One explanation for the continuation of transatlantic trade liberalization based on societal demands is that the rise in multinational and export-dependent companies may have biased the trade policies of developed countries in favor of freer trade (Milner 1988). The increasing interdependence that characterized the international political economy in the 1970s, according to this account, made firms more reluctant to push for the adoption of protectionist policies. Authors arguing within the institutionalist approach explain the persistence of relatively liberal trade policies in the 1970s with reference to the existence of an international regime (Lipson 1982; Keohane 1984; Keohane and Nye 1989). The international trade regime built around the GATT may have constrained national trade policies and helped developed countries avoid a protectionist backlash despite adverse international conditions. Finally, politicians in the United States and Europe may have defended liberal trade policies even in the face of strong protectionist lobbying because of their liberal ideas and values (Curzon and Curzon 1976, 195; Shonfield 1976, 95; Ruggie 1982; Goldstein 1993). While all of these accounts contribute to our understanding of the trade policies pursued on the two sides of the Atlantic in the 1970s, they face difficulties in explaining the coexistence of liberal and protectionist elements. Drawing on the protection-for-exporters argument, I explain the dominance of import competitors in the United States in the aftermath of the Kennedy round with exporters ’ lack of incentive to mobilize at a time when they benefited from improved foreign market access during the implementation of the Kennedy round agreements . Only the impending accession of the United Kingdom to the EC, together with the accompanying free trade agreements between the EC and the remaining...

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