The Omnibus Foreign Trade and Competitiveness Act of 1988 is an act passed by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washi ...

and signed into law by President Ronald Reagan.

History

During the 1970s, the U.S.

trade surplus The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...

slowly diminished and turned into an increasing deficit. As the deficit increased through the 1980s, some of the blame fell on the tariffs placed on US 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 Richard Andrew Gephardt (; born January 31, 1941) is an American attorney, lobbyist, and politician who served as a United States Representative from Missouri from 1977 to 2005. A member of the Democratic Party, he was House Majority Leader fr ...

(D-MO) to order the

Executive branch The Executive, also referred as the Executive branch or Executive power, is the term commonly used to describe that part of government which enforces the law, and has overall responsibility for the governance of a state. In political system ...

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 Zero-sum game is a mathematical representation in game theory and economic theory of a situation which involves two sides, where the result is an advantage for one side and an equivalent loss for the other. In other words, player one's gain is e ...

thought, it is considered by economists to be a modern form of

mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a ...

Expiration

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 William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and again ...

. It again expired in 1997 and was renewed once more by Clinton in 1999, and was followed by the

Trade Act of 2002 The Trade Act of 2002 (; ; ''U.S. Trade Promotion Authority Act'') granted the President of the United States the authority to negotiate trade deals with other countries and gives Congress the approval to only vote up or down on the agreement, not ...

References

*Appleyard, Dennis R, Alfred J Field and Steven L. Cobb. ''International Economics.'' McGraw-Hill Irwin, 2006
Cass, Ronald A. "Velvet Fist in an Iron Glove: The Omnibus Trade and Competitiveness Act of 1988" Regulation, Winter 1991.
{{US_tax_acts 1988 in law 1988 in the United States Foreign trade of the United States United States federal taxation legislation United States federal trade legislation 1988 in international relations

History

Expiration

See also

References