Ideology and the Multilateral Trade System

  • Marcel F. van Marion
Chapter
Part of the Contributions to Economics book series (CE)

Abstract

A clear difference between Japan and its major trading partners was confirmed by Japan, itself, in 1973, when it volunteered to restrict its imports to counter the threat that the United States would embargo — and later place a duty — on the export of edible fats and, in particular, on soy beans without taking formal import restrictive measures. Other users, such as the European Community, merely protested. The American measures were not formally applied.1 It should have been realized that a voluntary import restriction is not usual — importers do not restrict themselves, governments have to impose restrictions — and such action does not fit into the normal behaviour pattern of capitalist economies. The world trade system is based upon the assumption that importers want to import and to make a profit. It is assumed that governments sometimes restrain imports, under pressure from producers and their employees, but, unless they can make additional profits by them, voluntary restraints by importers are rare.2

Keywords

Commercial Policy Voluntary Export Restraint Multilateral Trade System World Trade System State Trading Country 
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Notes Chapter I

  1. 1.
    Jackson, John H. (1977), p. 932. It was in 1973. The rule has never become effective.Google Scholar
  2. 2.
    This striking event has escaped attention. In December 1973 a representative of the Ministry of Agriculture of Japan explained that Japanese trading companies had indeed committed themselves to voluntarily reduce their imports. Since demand for soy beans is rather inelastic, it would bring them additional profits.Google Scholar
  3. 3.
    With the exception of Haley (1989), pp. 403–23, who drew attention to the unique nature of Voluntary Export Restraints and its relationship with cultural peculiarities of Japan’s economic system and culture.Google Scholar
  4. 4.
    Statement by Forty Economists on American Trade Policy“; The World Economy, Vol. 12 no 2, June 1989, pp. 263–5.Google Scholar
  5. 5.
    Jackson (1989), Chapters 12 and 13, only mentions developing countries and state trading countries as special cases in which the economies or trading practices that do not well fit into the world rules of the trading system.Google Scholar
  6. 7.
    Cipolla (ed.) (1973), pp. 795–800 and p. 690.Google Scholar
  7. 8.
    Worldbank: “Some Effects of Commercial Policy on Trade, the Location of Production and Factor Movements”, June 1976.Google Scholar
  8. 15.
    Revived in the 1960s and 1970s by the United Nations Conference on Trade and Development and fairly described by Hart (1967). The subject disappeared from public discussions after the leakage of the content of the Houthakker report which denied the statistical evidence of a deterioration of the terms of trade, International Herald Tribune, May 26, 1975.Google Scholar
  9. 17.
    Mason (1946), mentions a plenty of examples. The book was published under the auspices of the Council for Economic Development and would have substantial influence on US policy makers after World War II.Google Scholar
  10. 18.
    Proposals for Consideration by an International Conference on Trade and Employment, as transmitted by the Secretary of States of the United States to His Majesty’s Ambassador at Washington“; Washington, 6th December, Miscellaneous No. 15 (1945), London His Majesty’s Stationary Office Cmd. 6709.Google Scholar
  11. 19.
    Gardner (1980), pp. 101, 102, quotes from “Summary of the Interim Report of the Special Committee on Relaxation of Trade Barriers”, 18 Dec. 1943; id. App. 45, p. 622.Google Scholar
  12. 20.
    Letter of the American Embassy, no 206, Appendix to Minutes of the Interdepartementale Raad voor de Handelspolitiek, IRHP, January 16, 1946, Document IRHP 17–2.Google Scholar
  13. 22.
    In a secret letter of 19 October 1945 from Secretary of State William L. Clayton containing the invitation the objectives of the Conference were in the following order: “a) the reduction of tariffs and other trade barriers and the elimination of all forms of discriminatory treatment in international commerce, b) the principles which should govern the institution and operation of international commodity agreements, c) elimination of restrictive trade practices by private business-enterprises, and d) the establishment of an international machinery for continuing consultation on these matters.”Google Scholar
  14. 24.
    A report on the discussions during the visit paid by Sir Percivale Liesching of the Board of Trade on 2 and 3 April 1946 to the Netherlands (Document IRHP) reveals the English views, shared by the Dutch Extra-Departmental Commission for the Study of the American Proposals, nominated by the Dutch government (IRHP 40–4, 16 August 1946 ). The advantages of cartels and monopolies would insufficiently have been considered by the Americans.Google Scholar
  15. 25.
    A proposal in this direction had been made by Australia and the Netherlands but had been defeated, mainly due to the resistance by the United States. “Verslag van de Nederlandsche deelneming aan de werkzaamheden van de redactiecommissie van de voorbereidende commissie van de conferentie der Vereenigde Naties over Handel en Werkgelegenheid, Lake Success, 20 Janúari-25 Februari 1947”; IRHP 54–7, No. 100. (Report on the Dutch participation in the activities of the Drafting Committee of the Preparatory Committee of the United Nations Conference on Trade and Employment.)Google Scholar
  16. 26.
    US Draft Charter of the International Trade Organization, US Department of State Publication 2598, Commercial Policy Series 93, Washington DC.Google Scholar
  17. 27.
    Jackson (1969), gives a detailed survey on the discussion on government intervention on behalf of economic development. Wilcox (1949) and Gardner (1980) have subtly described the erosion of the American proposals.Google Scholar
  18. 28.
    Harry C. Hawkins, American Counsellor in London and one of the pioneers of the International Trade Organization, stated during discussions with the Dutch government, that the United States would not want to prohibit cartels, but would want to eliminate those practices which would nullify tariff concessions, according to the report on the meeting of these discussions held on 23 August 1946, Document IRHP 41–7.Google Scholar
  19. 29.
    Verslag van de Nederlandse Delegatie naar de Tweede zitting van de Voorbereidende Commissie van de Internationale Conferentie over Handel en Werkgelegenheid, Deel I, De beraadslagingen over het Handvest, Genève“: p. 80, i.e. Report from the Dutch Delegation to the Second Session of the Preparatory Commission of the International Conference on Trade and Employment, Genève.Google Scholar
  20. 30.
    United Nations Conference on Trade and Employment held at Havana, Cuba, from November 21, 1947, to March 24, 1948: “Final Act and Related Documents”; Interim Commission for the International Trade Organization, Lake Success, New York, April, 1948.Google Scholar
  21. 35.
    Jackson (1989). The estimate is made by the GATT Secretariat: “The Tokyo Round of Multilateral Negotiations, Report of the Director-General of GATT; Geneva: GATT, 1980, pp. 37. After the Tokyo Round the United States Trade Representative (USTR) estimated tariffs on dutiable imports: USA 5.6%, EC 7%, Japan 12.5% and Canada 9%. The problem is that the duties are weighed by trade connected with the duty. Quantitative restrictions and other non-tariff barriers and trade prohibitive tariffs blur the picture.Google Scholar
  22. 37.
    See for a survey of these differences of opinion “Policy Perspectives for Trade and Economic Relations”, High Level Group on Trade and Related Problems, chaired by Jean Rey, Paris: OECD, 1972.Google Scholar
  23. 38.
    Krugman (ed.) (1986), took the lead in the welfare theoretical aspects of free trade and the positive implications of government intervention.Google Scholar
  24. 41.
    In Note No. 3916, May 27, 1975, the United Nations press section communicated: “What the group of experts agreed in general was that the statistical material which had been presented to it did not as such provide any clear or conclusive evidence of long-term deterioration.” The Houthakker Report that had to be published has never seen the light of day.Google Scholar
  25. 44.
    GATT: “Restrictive Business Practices”; Geneva: Sales No: GATT/1959–2, May 1959, contains a summary of various restrictive practices and a survey of the various efforts to create international rules in the field of restrictive business practices, like the Havana Charter, the Draft articles of agreements by the Ad-Hoc Committee on Restrictive Business Practices of the ECOSOC and the European Coal and Steel Community’s competition law (Articles 65 and 66 of the Treaty). The Report on Restrictive Business Practices; Arrangements for Consultations“; (L/1015) has been included in BISD, 9th Supplement, Geneva: February 1961, p. 170. The decision of the Contracting Parties is in the same BISD, p. 28.Google Scholar
  26. 45.
    The United Nations efforts have inter alia been described by Fikentscher (1982), p. 588.Google Scholar
  27. 46.
    Of 10 Voluntary Restraint Arrangements in electronics mentioned by Kostecki (1987) only 3 are represented correctly as VRA without a legal basis. Some of the VRAs are unilateral commitments, which were not requested by the importing country or based on anti-dumping legislation.Google Scholar

Copyright information

© Physica-Verlag Heidelberg 1993

Authors and Affiliations

  • Marcel F. van Marion
    • 1
  1. 1.EindhovenThe Netherlands

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