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50 2 IMPERIAL PREFERENCE AND THE U.S. REACTION, 1932–1947 On 17 June 1930, President Herbert Hoover signed the Smoot-Hawley Tariff Act, a bill that increased U.S. trade barriers to record levels. Measured as duties collected as percentage of dutiable imports, the average tariff went up to nearly 60 percent as a result of this bill. Only four years later, Congress passed the Reciprocal Trade Agreements Act, in which it allowed the president to engage in trade negotiations with foreign countries that could lead to tariff cuts of up to 50 percent. In this arguably most significant institutional change in the history of U.S. trade policymaking, Congress delegated to the president part of the power conferred on it by the Constitution to make commercial policy. The RTAA thus indicates a shift in U.S. trade policies away from unilateral protectionism toward reciprocal agreements with the aim of opening foreign markets. Pertinent to the importance of this institutional change, many authors have suggested explanations for why the RTAA came about and how it could be sustained . All four of the approaches presented in the introduction have been applied to this case. Several authors arguing within the societal approach base their explanations of the RTAA on the fact that the Democrats, traditionally the party of the low tariff, captured majorities in both houses of Congress in 1930 and the presidency in 1932 (Gourevitch 1986; Verdier 1994; Gilligan 1997a; Hiscox 1999; Schnietz 2000). Once in control of the decision-making institutions, they may have implemented a trade policy in accordance with their party platform. Later, this argument goes, Congress maintained the RTAA because free trade policies led to the disappearance of some import-competing industries owing to increased competition (Bailey, Goldstein, and Weingast 1997). Authors arguing IMPERIAL PREFERENCE AND THE U.S. REACTION 51 within the institutionalist approach add that the legislation persisted because it empowered exporter interests by allowing for reciprocal trade agreements (Gilligan 1997a), or because of a lock-in effect that secured its persistence even after a change in party control of Congress (Schnietz 2000). The RTAA also might have been maintained for reasons exogenous to the legislation itself. Such external influences could have been the onset of World War II and of the cold war (Verdier 1994), the rise of economies of scale (Chase 2005), or shifts in the geographical distribution of economic activities in the United States (Hiscox 1999). Other authors explain the passage of the RTAA with the lessons that legislators learned from the Smoot-Hawley act and the following Great Depression. The logrolling that led to the protectionist Smoot-Hawley legislation, and the possibly negative effects on economic growth of this bill, according to this account , taught legislators that they would all be better off if they managed to restrain themselves from voting for trade protection. They realized that congressional tariff setting was inefficient and hence delegated trade authority to the president, who, due to his broad constituency, might give more consideration to the broader ramifications of trade policy (Pastor 1980; Baldwin 1985). In doing so, legislators may also have tried to protect Congress from the pressure of organized interests, thus increasing the autonomy of politicians to enact trade policies in accordance with their own preferences (Bauer, Pool, and Dexter 1972; O’Halloran 1994; Destler 2005). While existing explanations of the RTAA and its maintenance capture some aspects of the puzzle, they leave several issues unresolved. The protection-forexporters argument, by contrast, can fill existing gaps and resolve remaining ambiguities . According to this argument, the British move to establish a system of imperial preference in the Ottawa agreements in 1932 triggered the change in U.S. trade policies that is reflected in the passage of the RTAA. More specifically, I contend that U.S. exporters mobilized in response to the costs imposed on them by discrimination abroad. Their lobbying effort convinced Congress to pass legislation that allowed the administration to engage in trade negotiations with the purpose of reducing foreign discrimination. The administration, in turn, became eager to protect exporter interests by way of a trade agreement with the United Kingdom. Not before 1938, and only after arduous negotiations, however, was it able to achieve such an agreement. In fact, as predicted by the protectionfor -exporter argument, the British government only accepted an agreement that was highly favorable to British economic interests. Concerns about the British system of imperial preference consequently continued until after World War II and explain both the main...

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