318 WORLD POLITICS year,out of fear that controversy over trade would derail high-priority items like NIRA.21 Thus,the Democratic Party faced two constraints in fashioning a trade policy.First,its old platform of unilateral tariff reductions had questionable support,both within and outside the party.Roosevelt's promise of tariff reform would need to be fulfilled some other way.Sec- ond,Democrats wanted to provide some durability for their preferred policies.As shown in Table 1,Democratic tariffs had lasted only as long as the Democrats'tenure in power.Although we now consider 1932 as a watershed election in American history,it was not perceived as such at the time.In 1934 the electoral future looked highly uncertain to Dem- ocrats.The Republicans after all had dominated national elections for the previous seventy years,and were it not for the depression,they would probably still have been in office.Given this uncertainty,Demo- crats were looking for a way to make their tariff policy last beyond their tenure.House members were facing midterm elections in November and the president was in the second year of what could be a single four- year term.Party members had not forgotten their last effort at tariff re- form,in 1913,when Woodrow Wilson fought long and hard for the Tariff Act,only to see it scuttled when the Republicans regained office. The institutional form of the legislation introduced in 1934 should be understood as serving dual purposes.The key innovation-coupling liberalization of U.S.tariffs with reductions in foreign tariffs-accom- plished two tasks.First,the form of tariff reduction served to broaden the range of tariff cuts acceptable to a majority in Congress.As shown below,it is easier to build majority support for reductions(and harder to form a coalition to negate an agreement)when tariffs are coupled with changes in access to foreign markets.Second,it provided durabil- ity for the reform efforts.Granting the president the right to negotiate "bundled"tariff treaties increased the costs to Republicans of increasing tariffs.Under the RTAA,even small adjustments could unravel many agreements and harm U.S.export interests.We take up each of these points in turn. BUILDING A COALITION IN FAVOR OF FREE TRADE We begin with a spatial model to show how the RTAA enabled the Dem- ocrats to ensure domestic political support for lower tariffs.The prefer- ences of political actors in a two-dimensional policy space are shown in Figure 3.The horizontal axis represents the level of domestic tariffs, 21 Tasca(.19),24. This content downloaded from 211.80.95.69 on Tue,13 Jan 2015 03:41:43 AM All use sbect to JSTOR Terms d Conditions
318 WORLD POLITICS year, out of fear that controversy over trade would derail high-priority items like NIRA.21 Thus, the Democratic Party faced two constraints in fashioning a trade policy. First, its old platform of unilateral tariff reductions had questionable support, both within and outside the party. Roosevelt's promise of tariff reform would need to be fulfilled some other way. Sec ond, Democrats wanted to provide some durability for their preferred policies. As shown in Table 1, Democratic tariffs had lasted only as long as the Democrats' tenure in power. Although we now consider 1932 as a watershed election in American history, it was not perceived as such at the time. In 1934 the electoral future looked highly uncertain to Dem ocrats. The Republicans after all had dominated national elections for the previous seventy years, and were it not for the depression, they would probably still have been in office. Given this uncertainty, Demo crats were looking for a way to make their tariff policy last beyond their tenure. House members were facing midterm elections in November and the president was in the second year of what could be a single four year term. Party members had not forgotten their last effort at tariff re form, in 1913, when Woodrow Wilson fought long and hard for the Tariff Act, only to see it scuttled when the Republicans regained office. The institutional form of the legislation introduced in 1934 should be understood as serving dual purposes. The key innovation?coupling liberalization of U.S. tariffs with reductions in foreign tariffs?accom plished two tasks. First, the form of tariff reduction served to broaden the range of tariff cuts acceptable to a majority in Congress. As shown below, it is easier to build majority support for reductions (and harder to form a coalition to negate an agreement) when tariffs are coupled with changes in access to foreign markets. Second, it provided durabil ity for the reform efforts. Granting the president the right to negotiate "bundled" tariff treaties increased the costs to Republicans of increasing tariffs. Under the RTAA, even small adjustments could unravel many agreements and harm U.S. export interests. We take up each of these points in turn. Building a Coalition in Favor of Free Trade We begin with a spatial model to show how the RTAA enabled the Dem ocrats to ensure domestic political support for lower tariffs. The prefer ences of political actors in a two-dimensional policy space are shown in Figure 3. The horizontal axis represents the level of domestic tariffs, 21 Tasca (fn. 19), 24. This content downloaded from 211.80.95.69 on Tue, 13 Jan 2015 03:41:43 AM All use subject to JSTOR Terms and Conditions
AMERICAN TRADE POLICY 319 High Q=Status quo tariff level,1934 Foreign Q-=Outcome under unilateral Tariffs tariff system Indifference Curve of Median Q Foreign Govemment Choice Set for Congressional Tariff Low Low High Democratic Democratie Floor Republican President Mecian Median Median U.S.Tariffs FIGURE 3 ACTOR PREFERENCES AND PREDICTED TARIFF UNDER PRE-RTAA SYSTEM ranging from low to high.The vertical axis represents the level of for- eign tariffs.Political actors have ideal policies,that is,tariff rates they prefer over all others.They prefer policies closer to their ideal policy to those farther away.To simplify matters,we consider the rest of the world to be one nation that sets the foreign tariff levels.For simplicity, we also assume Congress is unicameral. The historical record is clear about the location of actors in this space.First,all American political actors prefer foreign tariffs to be as low as possible.22 Therefore their ideal points line the horizontal axis in Figure 3.Second,in the late nineteenth and early twentieth centuries the parties had distinct preferences,with Republicans the party of high tariffs and Democrats the party of low tariffs.(See Table 1.)The median in Congress(the"floor median")is located between the Demo- cratic median and the Republican median.During periods of Republi- can majority,the median was among the Republicans with the lowest ideal rates;during Democratic majorities,it was among the Democrats with the highest ideal rates. While presidents shared the partisan inclinations on trade,their na- tional constituencies and their more direct concern with international 2Of course,the relative weight members assign foreign tariffs vis-a-vis imports will vary.Our as- sumption,however,is that all members put at least some weight on foreign tariffs and prefer lower for- eign tariffs for any given level of U.S.tariffs. This content downloaded from 211.80.95.69 on Tue,13 Jan 2015 03:41:43 AM All use subect to JSTOR Terms d Conditions
AMERICAN TRADE POLICY 319 High Foreign Tariffs Q = Status quo tariff level, 1934 Q-= Outcome under unilateral tariff system Indifference Democratic Democratic President Median Floor Median U.S. Tariffs Republican Median High Figure 3 Actor Preferences and Predicted Tariff under Pre-rtaa System ranging from low to high. The vertical axis represents the level of for eign tariffs. Political actors have ideal policies, that is, tariff rates they prefer over all others. They prefer policies closer to their ideal policy to those farther away. To simplify matters, we consider the rest of the world to be one nation that sets the foreign tariff levels. For simplicity, we also assume Congress is unicameral. The historical record is clear about the location of actors in this space. First, all American political actors prefer foreign tariffs to be as low as possible.22 Therefore their ideal points line the horizontal axis in Figure 3. Second, in the late nineteenth and early twentieth centuries the parties had distinct preferences, with Republicans the party of high tariffs and Democrats the party of low tariffs. (See Table 1.) The median in Congress (the "floor median") is located between the Demo cratic median and the Republican median. During periods of Republi can majority, the median was among the Republicans with the lowest ideal rates; during Democratic majorities, it was among the Democrats with the highest ideal rates. While presidents shared the partisan inclinations on trade, their na tional constituencies and their more direct concern with international 22 Of course, the relative weight members assign foreign tariffs vis-?-vis imports will vary. Our as sumption, however, is that all members put at least some weight on foreign tariffs and prefer lower for eign tariffs for any given level of U.S. tariffs. This content downloaded from 211.80.95.69 on Tue, 13 Jan 2015 03:41:43 AM All use subject to JSTOR Terms and Conditions