Omnibus Foreign Trade and Competitiveness Act
Encyclopedia
The Omnibus Foreign Trade and Competitiveness Act of 1988 is an act passed by the United States Congress
and signed into law by President
Ronald Reagan
.
slowly diminished and morphed in to an increasing deficit. As the deficit increased through the 1980s, the blame fell on the tariffs placed on American products by foreign countries, and the lack of similar tariffs on imports into the United States. Workers, unions and industry management all called for government action against countries with an unfair advantage
.
The Omnibus Foreign Trade and Competitiveness Act started as an amendment proposed by Rep.
Dick Gephardt
(D-MO) to order the Executive branch
to thoroughly examine trade with countries that have large trade surpluses
with the United States. If the trade surpluses continued, the offending country would be faced with a bilateral surplus-reduction requirement of 10%. Because of its style of zero-sum game thought, it is considered by economists to be a modern form of mercantilism
. The act was signed into law by President Reagan, slightly less strict than proposed, as the Omnibus Foreign Trade and Competitiveness Act of 1988. It expired in 1991 and was not renewed until 1994 by President Bill Clinton
. It again expired in 1997 and was renewed once more by Clinton in 1999.
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
and signed into law by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
.
History
During the 1970s, the American trade surplusBalance of trade
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...
slowly diminished and morphed in to an increasing deficit. As the deficit increased through the 1980s, the blame fell on the tariffs placed on American products by foreign countries, and the lack of similar tariffs on imports into the United States. Workers, unions and industry management all called for government action against countries with an unfair advantage
Comparative advantage
In economics, the law of comparative advantage says that two countries will both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods...
.
The Omnibus Foreign Trade and Competitiveness Act started as an amendment proposed by Rep.
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
Dick Gephardt
Dick Gephardt
Richard Andrew "Dick" Gephardt is a lobbyist and former prominent American politician of the Democratic Party. Gephardt served as a U.S. Representative from Missouri from January 3, 1977, until January 3, 2005, serving as House Majority Leader from 1989 to 1995, and as Minority Leader from 1995 to...
(D-MO) to order the Executive branch
Executive (government)
Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...
to thoroughly examine trade with countries that have large trade surpluses
Balance of trade
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...
with the United States. If the trade surpluses continued, the offending country would be faced with a bilateral surplus-reduction requirement of 10%. Because of its style of zero-sum game thought, it is considered by economists to be a modern form of mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
. The act was signed into law by President Reagan, slightly less strict than proposed, as the Omnibus Foreign Trade and Competitiveness Act of 1988. It expired in 1991 and was not renewed until 1994 by President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
. It again expired in 1997 and was renewed once more by Clinton in 1999.