3 - American and German Trade Policy: Between Liberal Multilateralism, Neoprotectionism, and Regional Integration

Summary

Translated by Tradukas

Between the end of the 1960s and 1990, trade relations between the United States and West Germany, as well as the relationship of both countries to the multilateral world trading system, were largely governed by two multilateral negotiating rounds of the General Agreement on Tariffs and Trade (GATT): the Tokyo Round (1973-9) and the Uruguay Round (1985-93).

Both of these trade rounds were affected by turbulence in the international monetary system. During the 1970s the dollar's weakness had a moderating effect on American trade policy and made it easier to adhere to multilateral principles. In the 1980s, however, over-valuation of the dollar led to a significant surge of imports and created serious problems for American exporters, which strengthened protectionist trends and led to aggressive strategies for opening newmarkets. Initiating a new multilateral trade round was supposed to alleviate the situation, but on its own it could not contain political pressures. Multilateralism was suddenly confronted with competing approaches.

The Federal Republic had always been one of the first states to call for multilateral trade liberalization. But West Germany was restricted when it was integrated into the European Community's (EC) common foreign trade policy, and it was always forced to compromise with France in this area. Furthermore, German farmers resisted liberalization of agricultural trade. But fundamental agreement existed between the United States and Germany over future development of the multilateral system. Particularly in the 1970s the two states cooperated to persuade the EC to conclude the Tokyo Round. The real conflicts between them lay in monetary policy and macroeconomic coordination after the two oil crises.