The US and the Trade Regime: Who Benefited from the Rules?

For over fifty years, the US trade balance has been in the red. That deficit has engendered a range of explanations for its tenacity, from an unusually low savings rate by Americans to currency misalignment. New among the explanations is one offered by the current administration:  the US has agreed to 'bad' trade treaties. This revisionist account argues that the root problem is found in the fundamental principles of the GATT/WTO regime, in particular, reciprocal reductions in MFN tariffs and the binding of rates. To better understand the nature of trade negotiations, and assess just what the US received in these agreements, Judith looks directly at what the US did, and did not, get in the foundational trade agreement that became the basis for the General Agreement on Tariff and Trade (GATT47). The micro-analysis helps to adjudicate among a set of arguments about American motivation and behavior. Judith argues first, that the rules of the system were established by the US to serve a domestic purpose, which was to favor export interests. Second, no matter what the current administration argues, all negotiations were balanced, in terms of transactional reciprocity. The US never gave more than they received, even to close security allies. Third, the logic of the trade regime changed over time. While the early regime was focused on stable access, there was an ideological shift in Washington and administrations eventually sought deep across the board border reductions, even as the dislocation from open markets increased.