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From Smoot-Hawley to Reciprocal Trade Agreements: Changing the Course of U.S. Trade Policy in the 1930s

In: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century

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  • Douglas A. Irwin

Abstract

Four years after passing the infamous Smoot-Hawley tariff in 1930, Congress enacted the Reciprocal Trade Agreements Act (RTAA), which gave the president the authority to undertake tariff-reduction agreements (without Congressional approval) with foreign countries. The resulting trade agreements reduced U.S. tariffs and culminated in the General Agreement on Tariffs and Trade (GATT) in 1947. Was the Great Depression responsible for bringing about this fundamental shift in U.S. trade policy? This paper analyzes the changes in U.S. trade policy during this period and argues that (i) the Depression as an international phenomenon motivated the unprecedented Congressional delegation of tariff-making powers, (ii) economic changes more the result of World War II than the Depression blunted Republican opposition to the RTAA and ensured its post-war survival.
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Suggested Citation

  • Douglas A. Irwin, 1998. "From Smoot-Hawley to Reciprocal Trade Agreements: Changing the Course of U.S. Trade Policy in the 1930s," NBER Chapters, in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 325-352, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:6899
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    References listed on IDEAS

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    1. Crucini, Mario J. & Kahn, James, 1996. "Tariffs and aggregate economic activity: Lessons from the Great Depression," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 427-467, December.
    2. Callahan, Colleen M. & McDonald, Judith A. & O'Brien, Anthony Patrick, 1994. "Who Voted For Smoot-Hawley?," The Journal of Economic History, Cambridge University Press, vol. 54(03), pages 683-690, September.
    3. Nelson, Douglas, 1989. "Domestic Political Preconditions of US Trade Policy: Liberal Structure and Protectionist Dynamics," Journal of Public Policy, Cambridge University Press, vol. 9(1), pages 83-108, January.
    4. Haggard, Stephan, 1988. "The institutional foundations of hegemony: explaining the Reciprocal Trade Agreements Act of 1934," International Organization, Cambridge University Press, vol. 42(1), pages 91-119, January.
    5. Crucini, Mario J, 1994. "Sources of Variation in Real Tariff Rates: The United States, 1900-1940," American Economic Review, American Economic Association, vol. 84(3), pages 732-743, June.
    6. Lee, Chung H., 1996. "Financial deregulation and integration in East Asia : edited by Takatoshi Ito and Anne O. Krueger, NBER-East Asia Seminar on Economics VoL 5, Chicago and London: National Bureau of Economic Research a," Journal of Asian Economics, Elsevier, vol. 7(4), pages 785-787.
    7. Canzoneri,Matthew & Ethier,Wilfred & Grilli,Vittorio (ed.), 1996. "The New Transatlantic Economy," Cambridge Books, Cambridge University Press, number 9780521562058, September.
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    Cited by:

    1. Paola Conconi & Giovanni Facchini & Maurizio Zanardi, 2012. "Fast-Track Authority and International Trade Negotiations," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 146-189, August.
    2. Jieun Lee & Iain Osgood, 2018. "Exports, Jobs, Growth! Congressional Hearings on US Trade Agreements," Working Papers 667, Research Seminar in International Economics, University of Michigan.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

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