reciprocal trade agreement

reciprocal trade agreement,

international commercial treaty in which two or more nations grant equally advantageous trade concessions to each other. It usually refers to treaties dealing with tariffs. For example, one nation may grant another a special schedule of tarifftariff,
tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic industries
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 concessions in return for equivalent advantages. Originally reciprocity agreements involved bilateral tariff reductions that were not to be extended to third countries. In the 18th cent., England relaxed its Navigation Acts in return for similar action by other nations. In the 19th cent. the German ZollvereinZollverein
[Ger.,=customs union], in German history, a customs union established to eliminate tariff barriers. Friedrich List first popularized the idea of a combination to abolish the customs barriers that were inhibiting trade among the numerous states of the German
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 was based on reciprocity, and the system of reciprocity fostered by Napoleon III worked strongly in favor of free tradefree trade,
in modern usage, trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses.
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. After the downfall of the French Second Empire (1870), many European countries began to follow a policy of high tariffs. In the United States reciprocity was advocated as part of the tariff policy after 1880. The use of the most-favored-nation clausemost-favored-nation clause
(MFN), provision in a commercial treaty binding the signatories to extend trading benefits equal to those accorded any third state. The clause ensures equal commercial opportunities, especially concerning import duties and freedom of investment.
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 after 1922 resulted in a widespread exchange of tariff concessions; it was followed by the Trade Agreements Act (1934). Since 1948 the general policy of the United States has been to negotiate reciprocal tariff concessions within the framework originally established by the General Agreement on Tariffs and TradeGeneral Agreement on Tariffs and Trade
(GATT), former specialized agency of the United Nations. It was established in 1948 as an interim measure pending the creation of the International Trade Organization.
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 (GATT). The Trade Expansion Act (1962) provided for negotiations, under GATT auspices, to expand reciprocal trade agreements, especially with the European Economic Community, or Common Market (now part of the European UnionEuropean Union
(EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community (EC), an economic and political confederation of European nations, and other organizations (with the same member nations)
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). The act resulted in the Kennedy Round (1964–67) and the Tokyo Round (1974–79) of GATT talks, which produced reciprocal tariff reductions, mainly between the United States and W Europe, and new rules on customs and duties. GATT's Uruguay Round (1986–93) culminated in the creation (1995) of the World Trade OrganizationWorld Trade Organization
(WTO), international organization established in 1995 as a result of the final round of the General Agreement on Tariffs and Trade (GATT) negotiations, called the Uruguay Round.
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. Reciprocal agreements may also deal with such matters as rights of foreigners and consular relations.
References in periodicals archive ?
With regard to trade agreements, this has been going on since FDR's radical New Deal when Congress passed and President Franklin Roosevelt signed the Reciprocal Trade Agreement Act (RTAA) of 1934.
The Bipartisan Trade Promotion Authority Act of 2002 required the President to notify Congress 90 calendar days prior to initiating negotiations on a reciprocal trade agreement with a foreign country.
The EPA is a reciprocal trade agreement, meaning African countries must also reduce duties for imports from Europe.
The Proposals are not limited to an expansion of the reciprocal trade agreement program on a multilateral basis; its subject matter goes far beyond trade barriers, border measures, or trade preferences.
Their success was due in part to the 1934 Reciprocal Trade Agreement Act and its various extensions, which served to lower the costs to these interests associated with collective action and create the conditions necessary to shift legislative preferences away from protection toward liberalization.
policy from the Payne-Aldrich Tariff of 1909 to the Underwood Tariff of 1913 and from the Smoot-Hawley Tariff of 1930 to the Reciprocal Trade Agreement Act of 1934 somewhat tortured exercises.
With respect to trade preferences provided under the Caribbean Basin Initiative which will expire in September 2008, the United States has never before confronted the question of extending unilateral trade preferences to a country that has rejected a reciprocal trade agreement.
Although the President has the authority under the Constitution to negotiate international agreements, typically a reciprocal trade agreement requires an implementing bill and, therefore, congressional action to bring it into force.
His visionary Secretary of State Cordell Hull negotiated a number of bilateral trade agreements to lower tariffs under the Reciprocal Trade Agreement Act passed by Congress in 1934.
In contrast, a reciprocal trade agreement yields foreign liberalization, the benefits of which are concentrated in export industries.
The significance of the government approvals in Panama is that Panama and the United States have a reciprocal trade agreement that will dramatically shorten the lengthy FDA approval process for sale of both Medi-Kwik and Kwik-Kill in the U.
105th Reciprocal Trade Agreement Authorities Act of 1997 107th Bipartisan Trade Promotion Authority Act of 2001 TPA renewed in Title XXI, the Bipartisan Trade Promotion Authority Act of 2002.