Trade Act Of 1974

Summary of Trade Act Of 1974

An act that provided the president the negotiating authority essential to participate in the Tokyo Round (read this and related legal terms for further details) of tariff reductions. The act empowered the president to reduce by up to 60 percent all duty rates above 5 percent ad valorem and to abolish duty rates of 5 percent ad valorem or below; such duty reductions were to be phased over ten years. In addition, the act authorized an accelerated elimination of nontariff barriers and adjustment assistance (such as unemployment compensation and job training for American workers displaced by exports), and permitted a grant of Most Favored Nation (read this and related legal terms for further details) status to communist countries under certain circumstances. Apart from these trade liberalizing measures, the act empowered the president to withdraw from any trade agreement and to institute higher duties. The grounds upon which domestic industries might receive a finding by the International Trade Commission that they had been injured by foreign competition were also reinforced. Such a finding would mandate punitive tariff or quota action by the president.

(Main Author: William J. Miller)