The entire doctrine of mercantilism would be attacked by the writings of Adam Smith and David Ricardo, both of whom stressed the desirability of imports and stated that exports were only the cost necessary to acquire them. Their theories have gained increasing influence and helped spark a trend towards more liberal trade – a trend that will be led by Britain. The world`s major countries founded GATT in response to the waves of protectionism that crippled world trade during the Great Depression of the 1930s and contributed to its expansion. In successive rounds of negotiations, GATT has significantly reduced tariff barriers for industrial products in industrialized countries. Since the beginning of GATT in 1947, average tariffs in industrialized countries have risen from about 40% to about 5% today. These tariff reductions helped to promote the enormous expansion of world trade after the Second World War and the associated increase in real per capita income in both developed and developing countries. The annual gain from the elimination of tariff and non-tariff barriers resulting from the Uruguay Round Agreement (negotiated between 1986 and 1993 under the auspices of GATT) was estimated at about $96 billion, or 0.4 per cent of world GDP. The stated purpose of the RTAA, which the president signed on June 12, 1934, was “to expand foreign markets for U.S. products (as a means of supporting the current situation in restoring American living standards, overcoming domestic unemployment and the current economic depression, increasing the purchasing power of the American public”).  To achieve this goal, the law gave the president the power to enter into bilateral trade agreements with foreign governments for three years, which could increase or decrease any existing tariff rate of up to 50%. The RTAA clarified that “the proclaimed duties and other import restrictions apply to..
all foreign countries. Roosevelt`s Secretary of State, Cordell Hull, found an ingenious solution. Working with Congress, he developed legislation – the Reciprocal Trade Agreements Act (RTAA) – to give the president the power to negotiate trade agreements that would shrink the United States. Tariffs in exchange for mutual concessions from other countries. In a major break with the past, agreements negotiated under this power would not require congressional approval; That is, Congress has delegated its constitutional power to impose tariffs to the executive branch for the period of entry into force of the RTAA. Congress was willing to do so because most members acknowledged their mistake in the registration exercise that led to the Smoot-Hawley Customs Act, and because the approach of negotiating tariff reductions with their respective trading partners received support from industries seeking to increase their export sales. In 1934, the Roosevelt administration undertook two initiatives that signaled a desire to reconnect economically with the rest of the world. The first was the creation of the Export-Import Bank. In February 1934, Roosevelt established the bank as an institution to finance American trade with the newly recognized Soviet Union. The following month, he founded a second import-export bank to finance trade with Cuba; In July 1934, the activities of the second bank were extended to all countries except the Soviet Union. In 1935, the two banks were merged and Congress passed a law that gave the newly unified bank more power and more capital.
In the years leading up to World War II, the Export-Import Bank, while lending to countries outside the Western Hemisphere, such as Italy and China, focused its efforts on Latin America, where it proved to be an important element of good-neighborly policy. As a result, the United States and its allies negotiated the General Agreement on Tariffs and Trade (GATT) in 1947 and, under the auspices of the GATT, the United States led the world in eight rounds of multilateral negotiations aimed at eliminating barriers to trade. Only a few dozen countries participated in the first rounds, but at the end of the last successful round in 1995, the Uruguay Round, 125 countries participated. Thus, the TPP faces strong political headwinds, fueled by great frustration among Americans over decades of stagnant wages and rising income inequality. .