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Edward S. Kaplan, _American Trade Policy, 1923-1995_. Westport, CT:
Greenwood Press, 1996. x + 176 pp. Bibliography and index. $55.00
(cloth), ISBN: 0-313-29480-1
and
Edward S. Kaplan and Thomas W. Ryley, _Prelude to Trade Wars: American
Tariff Policy, 1890-1922_. Westport, CT: Greenwood Press, 1994. 160 pp.
Bibliography and index. $49.95 (cloth), ISBN 0-313-29061-x.
Reviewed for EH.Net by Susan Aaronson, Department of History, University
of North Texas and The Brookings Institution <[log in to unmask]>
Trade is where foreign and domestic policies meet. Consequently,
the development of trade policy is fraught with controversy--between
nations; between the affected interests and policymakers; between Congress
and the Executive Branch; and between government agencies that negotiate
and administer trade protection and agreements. Edward S. Kaplan's new
book, _American Trade Policy, 1923-1995_ promises to address some of that
complexity. Kaplan is to be commended for attempting to tackle the
morass of U.S. trade policy. Regrettably, his book falls short.
Kaplan relies on a few secondary sources, not primary sources, and
thus, he provides an incomplete understanding of the politics and
economics of trade policymaking. For example, rather than examine the
Congressional Record or Congressional hearings, he relies on _The New York
Times_ (and no other papers) to describe the development of trade policy
legislation. He consistently cites the same four secondary sources for
his analysis of trade policy and ignores prominent analysts of trade such
as E. E. Schattsneider (_Politics, Pressures and the Tariff_,New York,
1935) and John Jackson (_The World Trading System: Law and Policy of
International Economic Relations_, Cambridge, MA, 1989). He does not
review government reports for statistics or history (such as the Annual
Report of the U.S. Tariff Commission on the Trade Agreements Program),
speeches of the Presidents, or speeches or reports from the U.S. Trade
Representative.
U.S. trade policy has always reflected freer trade and
protectionist sentiment. Even during the supposed "glory days" of U.S.
leadership of free trade, the U.S. protected some sectors. Kaplan seems
to miss this crucial point because he oversimplifies the process by which
trade policy is made. The nature of such protection as well as its
endurance depends on the state of the economy, politics, and culture.
In contrast with many other nations, authority for U.S. trade
policy is divided. The President has power to control foreign policy, but
under the constitution, Congress has the power to regulate international
commerce and to tax. Some special interests benefit from open markets and
others benefit from protection. As a result, America has always had a
bifurcated trade policy, with efforts to liberalize trade coexisting with
protection. Finally, given the many interests concerned about trade, some
protection is necessary to "buy" political support for freer trade
measures. This has been true since 1789. Why is such protection
necessary? Because trade can create both winners and losers. Those who
are hurt may deserve temporary protection, despite the costs to consumers
and taxpayers. Such protection is accepted by GATT law and considered
appropriate.
Kaplan believes that the Clinton Administration is protectionist
and negating U.S. leadership of global efforts to free trade. In his
view, "U.S. trade policy in 1995 has come full circle since the
protectionist 1920s." This thesis is flawed because Kaplan does not
understand modern modes of protection. Is the Clinton Administration
really more protectionist or is it harder to reduce the types of
protection nations rely on today?
In the first five decades of the twentieth century, nations relied
on border measures (tariffs, exchange controls, quotas etc..) to protect.
These border measures are overt and were easily reduced in the first eight
GATT rounds. As a result, today tariffs in most GATT members are
relatively low. Ironically, GATT's very success may have encouraged
nations to rely on "covert" trade barriers (domestic measures) such as
subsidies, government procurement policies or regulation in recent years.
Because these administrative measures are domestic policies, it is hard to
determine whether nations use such regulations with the intent to
discriminate against foreign producers. Under 301 trade legislation, when
the President confronts such trade barriers, he is required to investigate
and sometimes to punish protectionist nations with retaliatory protection
in the United States. Kaplan fears that America (because of Super 301)
appears less disposed towards multilateralism and is "moving from a
multilateral trade approach within the WTO to a unilateral one under which
it threatens countries like Japan with tariff increases for failing to
open their markets" (p. x). Had Kaplan read primary sources or Susan
Schwab's _Trade-offs_ (Cambridge, MA, 1994) he would understand that the
Clinton Administration is reluctant to use these powers, nor did it call
for them.
A more careful review of the history of Uruguay Round negotiations
and enabling legislation shows that both the Bush and Clinton
Administrations have tried hard to broaden the rules that govern trade to
include corruption and labor standards, and to complete negotiations to
bring new sectors into the GATT/WTO system such as services and
agriculture. This is not a protectionist record. Ironically, Jesse
Helms, Pat Buchanan, and other noted protectionists frequently complain
that the United States under Clinton is too supportive of multilateralism.
The author ignores the Clinton Administration's push to expand the North
American free trade agreement (NAFTA); its continued leadership of global
efforts to free trade; its unwillingness to cite many nations (from
Argentina to India) under super 301; and its attempts to bring non-WTO
members into membership (such as Saudi Arabia, China, Ukraine, and
Russia). Finally, instead of relying on domestic tools to protect, the
Clinton Administration seems to be relying on international tools. The
U.S. is using the dispute settlement mechanism of the WTO. From January,
1995 to July, 1996, the U.S. has invoked dispute settlement in 16 cases,
more than any other country in the world.
Writing a history of tariffs is a daunting task. It is hard to
make it interesting. Dr. Kaplan has also teamed up with Thomas W. Ryley
in an earlier book on the history of tariff policy, _Prelude to Trade
Wars_, which does a good job at describing the politics of trade policy
without being dry. The book is especially good at explaining the
background of the participants and how they came to their positions.
Unfortunately, the authors rely principally on secondary sources to make
their case. Consequently, they are making their arguments based on the
strong (or weak shoulders) of others rather than their own extensive
research.
For example, describing the Emergency Tariff Act of 1921, the
authors write "to all appearances in 1914, the country desired a moderate
tariff bill." To prove their point they cite one article in the American
Economic Review, written in 1923. That would not convince most historians
that is what the country desired.
The analysis is hampered by sloppy writing and inadequate
argumentation. For example, "The McKinley Tariff ... was the first of a
number of tariff bills that raised duties to their highest levels in U.S.
history." Which one was the highest? All of them? Moreover, the title
is a shocker. Which trade wars are the authors talking about? In the
20th century, when did the U.S. go to war over trade? The very term
"trade wars" gives one the sense that trade is a zero sum game, a
competition. A more plausible assumption is that entities trade because
they think they can both gain.
The authors' contribution is strongest in political history.
(Ironically, the authors write for a series called Contributions in
Economics and Economic History.) For those interested in the politics of
American tariff making in this period, they provide a decent read. But to
understand U.S. trade policy, one must understand the social,
technological and economic environment, as well as the political
environment..
Those readers who want to gain a better understanding of the
complexities of the history of U.S. trade policy should look beyond these
two books. Good books with very different perspectives include Thomas
Zeiler's _American Trade and Power in the 1960s_ (New York, 1992); Alfred
Eckes's _Opening America's Market: U.S. Foreign Trade Policy since 1776_
(Chapel Hill, NC, 1995); I.M. Destler's _American Trade Policies: System
Under Stress_ (Washington, DC, 1995); G. John Ikenberry et al, _The State
and American Foreign Economic Policy_ (Ithaca, NY, 1984); William Becker
and Samuel F. Wells, eds., _Economics and World Power: An Assessment of
American Diplomacy since 1789_ (New York, 1984); Susan Aaronson, _Trade
and the American Dream_ (Lexington, KY, 1996); and John Dobson, _Two
Centuries of Tariffs_ (Washington, 1976).
Susan Ariel Aaronson
Department of History
University of North Texas
and
Guest Scholar in Economics
The Brookings Institution
Susan Aaronson is also a regular commentator on Public Radio International's
_Marketplace_.
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[log in to unmask] (Robert Whaples, Book Review Editor, EH.Net.
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