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Cordell Hull Award Recognizes Senator Grassley’s Support for Free Trade (July 14, 2004)

Charles E. Grassley, the senior U.S. senator from Iowa, is to receive the 2004 Cordell Hull Award for his “stalwart and independent-minded support for trade liberalization and the multilateral trading system”.  The award is presented by the Cordell Hull Institute, which was formed in 1998 by a bipartisan group in Washington – headed by former U.S. Secretary of State Lawrence Eagleburger – concerned about the loss of direction in international economic policies.   Last year’s recipient was Senator Chuck Hagel of Nebraska. 

Senator Grassley is Chairman of the Finance Committee in the United States Senate where he is also a member of the agriculture, budget and judiciary committees, as well as  chairman of the caucus on international narcotics control.  He is a member, too, of the Con-gress’s joint taxation committee.  

The award will be presented to Senator Grassley at a reception at the U.S. Chamber of Commerce in Washington on July 14, 2004.

On the same day the Institute will hold, also at the U.S. Chamber, a conference to mark the seventieth anniversary of Cordell Hull’s Reciprocal Trade Agreements Act of 1934.  The conference will review the thinking behind the multilateral trading system, now administered by the World Trade Organization, and the progress being made in resuming the Doha Round negotiations, which collapsed in Cancún, Mexico, last September.

Cordell Hull’s Legacy  

The Institute honors the vision and perseverance of Cordell Hull in pursuing the idea of an international economic order as a basis for peace and prosperity in the world, first in the United States Congress as a representative and senator from Tennessee, then Franklin D. Roosevelt’s Secretary of State from 1933 through 1944.

Hull was instrumental in achieving the two most fundamental reforms in U.S. trade policy.  One was the adoption of unconditional most-favored-nation (i.e. equal) treatment, which Congress enacted in 1922.  The other was persuading Congress in the Reciprocal Trade Agreements Act of 1934 to move from the “autonomous tariff” to the “contractual tariff” by delegating to the President the setting of tariffs and making of trade policy.

During and after the First World War, Hull pressed for the establishment of a multi-lateral trade regime, but governments failed even to restore the pre-1914 system of bilateral commercial agreements based on unconditional MFN treatment that had evolved in the period 1840-80 and the world economy disintegrated as economic nationalism led to autarkic and discriminatory excesses.  On becoming Secretary of State, Hull’s Reciprocal Trade Agreements Program, following the worldwide havoc and misery wrought by the Smoot-Hawley Tariff Act of 1930, was a key factor in rebuilding international commerce. 

During the Second World War, Cordell Hull inspired planning for the rules-based multilateral trading system that came into being in 1948 under the General Agreement on Tariffs and Trade, today a part of the wider WTO system.

Senator Grassley's Position

An idea of Senator Grassley’s positions on current trade policy issues is conveyed by the following selection of quotes from recent statements.

On Trade Liberalization and Peace

"Too often policymakers and politicians only talk about economics when discussing international trade.  But my interest goes far beyond economics.  While political leaders set the tone for international relations, it’s a spit in the ocean compared with what business-to-business contacts can achieve.  History shows that people that trade together don’t go to war against each other."

Speech to Latin American Ambassadors, Washington, DC, March 19, 2003

On Free Trade, Democracy and Freedom

"Free trade promotes economic growth around the world… The fastest growing developing countries are those that are most open to trade.  Furthermore, and others would agree, free trade promotes the ideals of democracy and freedom."

Interview with the Chilean-American Chamber of Commerce, Washington, DC, July 2003

On Abiding by WTO Rulings

"While we may not agree with each and every decision that comes out of the WTO [dispute-settlement body], we should not pick and choose which decisions we will comply with…  The United States benefits greatly from a rules-based world trading system.  We have had considerable success in bringing down foreign import restrictions and this has resulted in increased trade, economic growth and more jobs right here in the United States.  When we comply with adverse decisions we strengthen our position in other cases where we challenge the import restrictions of our trading partners, such as the de facto bio-technology moratorium adopted by the European Union, which continues to hurt our farmers and is now under challenge in the World Trade Organization.  I want other countries to comply when we win and so I think it is important to comply when we lose."

Speech in the U.S. Senate, May 23, 2003

On Agriculture and Multilateral Negotiations

 

"Without a comprehensive round of global trade negotiations, it will be extremely difficult for American agriculture … to get rid of the trade-distorting subsidies and barriers that shut our agricultural producers out of foreign markets…  If we lose the momentum for the liberalization of world agricultural markets that we gained with the successful conclusion of the Uruguay Round negotiations, we may never be able to recover."

Statement in the U.S. Senate, February 6, 2001 

On Liberalizing Trade Services

"Because we are so competitive internationally, we have a $83 billion trade surplus in services.  Liberalization of trade in services is only five years old.  The potential to build even more export growth in services is tremendous.  [Renewal of trade-negotiating] authority will help us realize that potential.  With today’s historic vote, America’s days on the sidelines are numbered.  American is almost back in the game."

Speech in the U.S. Senate following the successful closure vote

on the Bipartisan Trade Promotion Authority Bill, May 22, 2002

 

On a Bilateral FTA Strategy

 

"First, to move forward bilaterally is not good trade policy.  The economic impact of bilateral [free trade areas] is limited.  Second, a bilateral FTA strategy can hurt the foundations of the multilateral trading system.  The same product gets different treatment depending on where it is made and where it is sold…  A trade policy that relies on bilateral trade agreements is ad hoc.  It is settling for second best.  And it is shirking the international trade challenges of the 21st century.  We can do better…" 

Remarks to the Global Business Dialogue, Washington, DC, June 18, 2001

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Cordell Hull Award

Senator Charles Grassley received the second Cordell Hull Award at an Institute reception in Washington, DC, on July 14, 2004.