Center for the History of Business: Fighting Over Free Trade

Monday, January 23, 2017

The anger over trade in the 2016 elections calls to mind the fights about trade in the 1990's over President Bill Clinton’s campaign to ratify North American Free Trade Act in Congress, the “Battle for Seattle” at the World Trade Organization’s 1999 ministerial conference, and the way free trade has been a controversial issue in America politics for many decades.

My dissertation, “Fraying Fabric: Textile Labor, Trade Politics, and Deindustrialization, 1933-1974,” harkens to an earlier time (often overshadowed by Vietnam and Watergate) where similar concerns over trade, foreign competition, and job loss sparked repeated battles on trade legislation. I especially focus on the actions of labor, capital, and the state amid the decline of the U.S. textile industry in the middle decades of the twentieth century

In the 1960's and 1970's, unions in domestic industries, such as textiles, steel, and electronics, were facing intense foreign competition and had turned to Congress for legislation to impose quotas on imports. In turn, multinational corporations opposed import quotas; some of them would form the Emergency Committee for American Trade (ECAT) in 1967 for that purpose. Labor and business would battle on three trade-related bills: the Mills Bill of 1970 and the Burke-Hartke bill in 1972 and 1973 (which proposed establishing import quotas for a wide range of manufactured goods), and the Trade Act of 1974 (which established fast-track trade authority for the president).

A Henry Belin du Pont Research Grant funded my research on these topics in the National Industrial Conference Board and National Association of Manufacturers papers, housed at Hagley. Of particular help was a document outlining a tax survey of NAM members that the organization used to build an argument against Burke-Hartke.  This bill would have resulted in multinational corporations paying taxes to both the U.S. and their host nation and reduce foreign investment and, therefore, foreign sales and investment, all while increasing domestic unemployment.

NAM used its survey results, and the opinions of executives of corporations like Xerox, Pfizer, Chrysler, Mobil Oil, Inland Steel, and US Steel, to outflank their opponents in organized labor and defeat legislation inspired by anger at the negative effects of trade.

These and other primary sources I found at Hagley helped me piece together the story of how multinationals used their growing power to turn back a growing populist call for import quotas from two less-powerful entities: organized labor and politicians aligned with the New Deal political order. The outcome of these political battles on trade in the 1970s set the stage for further political and economic shifts toward a new political order, the effects of which we are dealing with today.

James C. Benton is currently the Slavery, Memory, and Reconciliation Fellow in the Office of the President at Georgetown University, where he earned his Ph.D. in history.