Milford chronicle., 1948-06-11
WHAT IT MEANS;
The Reciprocal
Trade Program
BY ROBRRT E. GEIGER


WASHINGTON = The term "re-
ciprocal trade will be in the head
lines for the next few weeks.
That's because the Reciprocal
Trade Act passed by Democratic
Congress in 1884 and renewed by
later Congresses will expire June
~ unless the present Republican
Congress extends it. This act has
an important bearing on United
States business, manufacturing and
farming. If it is not extended the
platform, upon which the u. S.
has been conducting much of its In
ternational trade collapses.
Here's the background:
In 1880 a Republican Congress
passed the Smoot-Hawley law. 1t
set up some of the highest tariffs
in U. S. history. This law said to
foreign nations: You will have to
pay this government a certain
price to bring certain products into
the United States for sale. The ef-
feet of this was to increase the
price the U. S. public paid for some
imported goods. This protected
United States citizens who had the
same kind of goods to sell but
wanted higher prices than foreign
ers asked in this country.
After we did this other nations
set high tariffs on the goods we
wanted to sell them. This increased
the prices the public in foreign
countries had to pay for American
goods. Thus, fewer American
goods were exported. The 1884
Democratic Congress changed our
system. This was during the de-
preston when this government
wanted to start world trade going
again. The Democrats set up recip-
rOcal trade agreements. Under this
plan, since 1884, we have lowered
tariffs by as much as IS per cent
on some goods. Other nations low
cred some Of their tariffs in return,
Thus we can sell our goods at
cheaper prices abroad. Some other
nations can sell their goods cheap
er in this country. The theory is
that this stimulates trade and
prosperity. Such trade agreements
now can be approved by the Presi-
dent without consulting Congress.
One argument against the act has
been this: Some business has been
damaged by competition let in un-
der the law. One of the acts chief
opponents, Rep. Gearhart (R-
Calif) chairman of a House Ways
and Means subcommittee has been
holding closed hearings on extend
ing the act. One proposal is that
Congress be given authority to re-
view foreign trade agreements, in
stead of only the President.
The possibilities are these:
/. That Congress may kill the
act. This is considered unlikely 2.
That the act will be extended, but
nobody knows for how long. Presi-
dent Truman has recommended
three years. The Republicans have
proposed to extend it only one
year, so Congress then may inves-
tigate the situation more thorough
ly. 8. That the act may be extended
but important changes will be
made.
A trade conference was held in
Geneva all last summer. Twenty
three countries, including the L. S.,
attended. They worked out num-
ber of agreements. The United
States already had proposed a per-
manent international trade Organi-
7ation IT0) under the United Ma
tions. Fifty-four nations met in
Havana, Cuba, in conference that
lasted from the fall ef 1947 until
March 194S. They signed an agree
ment to set up the ITO. But this or
ganization won't exist until Con-
gress and the other nations ratify
the agreement and Congress won't
act on it until 1949.