Abstract
BEFORE considering the framework of an agenda that would meet the needs of the international trading system, it might help, in drawing together the discussion, to elaborate a little on the main problems to be addressed in the new GATT round.
‘One of the grave defects of Cordell Hull’s reciprocal Trade Agreements Program was that it secured domestic political support for tariff negotiations mainly by reinforcing the protectionist view of those negotiations. Hull’s instinct was sound insofar as it rested on the notion that the willingness of the United States to reduce its own tariffs could be used as a bait to secure reductions from other countries which in the 1930s were generally reluctant to act. But [by the 1960s] the mystique of reciprocity and the mechanics of the product-by-product method were strengthening their hold on the US imagination at the same time that successive GATT tariff rounds were beginning to exhaust the possibilities for further reductions under the existing system’
— Kenneth W. Dam, The GATT: Law and International Economic Organization (1970)
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Notes and References
Dam, op. cit., p. 290–91.
Ibid., p. 290. Also see Curzon, op. cit., pp. 260–89, and Gardner Patterson, Discrimination in International Trade: the Policy Issues 1945–65 (Princeton: Princeton University Press, 1966) pp. 120–70.
Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade (Geneva: GATT Secretariat, 1979) Article 11(1).
Ibid., Article 11(1)(b).
Sidney Golt, ‘Beyond the Tokyo Round’, The Banker, London, August 1979, p. 49.
Agreement on Interpretation …, op. cit., Article 8(3).
Dam, op. cit., p. 175.
In this connection, see Eliza Patterson, ‘Features of the Omnibus Trade Act in the United States’, The World Economy, December 1984.
For an analysis of the modern version of the ‘pauper labour’ argument for protection, see Lal, Resurrection of the Pauper-labour Argument, Thames Essay No. 28 (London: Trade Policy Research Centre, 1981).
On this point, see Ernst-Ulrich Petersmann, ‘Economic, Legal and Political Functions of the Principle of Non-discrimination’, The World Economy, March 1986. Dr Petersmann is a Counsellor in the Legal Office of the GATT Secretariat.
C.F. Teese, ‘A View from the Dress Circle in the Theatre of Trade Disputes’, The World Economy, March 1982.
D. Gale Johnson, World Agriculture in Disarray (London: Macmillan, for the Trade Policy Research Centre, 1973) p. 255.
For a discussion of the consequences, see Trends in International Trade, a Report by a Panel of Experts (Geneva: GATT Secretariat, 1958), the panel consisting of Gottfried Haberler (chairman), Roberto de Oliveira Campos, James E. Meade and Jan Tinbergen. Also see Brian Fernon, Issues in World Farm Trade: Chaos or Cooperation? (London: Trade Policy Research Centre, 1970), and D.G. Johnson, op. cit.
See Corbet, ‘Excesses of the CAP and Thailand’s Manioc’, The World Economy, September 1982. For a more general discussion, see T.E. Josling, Mark Langworthy and Scott Pearson, Options for Farm Policy in the European Community, Thames Essay No. 27 (London: Trade Policy Research Centre, 1981).
D.G. Johnson, op. cit., pp. 255–56.
In this connection, see Anne O. Krueger, ‘Loans to Assist the Transition to Outward-looking Policies’, The World Economy, September 1981.
Agreements Relating to the Framework for the Conduct of International Trade, op. cit.
‘Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries’, ibid., para. 7, p. 7.
See Scott et al., op. cit., Ch. 5.
For a scholarly analysis of the ‘tariff escalation’ issue, see Alexander J. Yeats, Trade Barriers Facing Developing Countries (London: Macmillan, 1974), especially pp. 79–100.
The concept of the effective (as opposed to the nominal) rate of protection, in measuring the degree of protection afforded to an economic activity in terms of the value added in that activity, takes into account the duties levied on imports of material inputs. The concept was developed in Harry G. Johnson, ‘The Theory of Tariff Structure, with Special Reference to World Trade and Development’, in Johnson and Peter Kenen (eds), Trade and Development (Geneva: Libraire Droz, 1965),
and in Corden, ‘The Structure of a Tariff System and the Effective Rate of Protection’, Journal of Political Economy, Chicago, June 1966.
Stephen S. Golub and Finger, ‘The Processing of Primary Commodities: Effects of Developing Country Export Taxes’, Journal of Political Economy, June 1979.
In considering Japan’s position, however frustrating it may be to sell in her market, the following fundamental points remain valid: (a) There is no reason for trade to balance between any pair of countries or even between a country and the rest of the world. (b) When a country runs a current-account surplus, it is transferring goods in return for claims on future goods. Except in a crudely mercantilist framework, this does not impose a cost; it provides a benefit to the rest of the world. A transfer of savings abroad in this way is particularly desirable in an era of capital shortage such as the present. (c) There is no reason to expect an agreement on similar policies to lead to similar structures of output and trade. What trade policies actually lead to depends on the economic characteristics of a country and the tastes of its citizens. (d) Within a market-based system of trade, the criterion of value is individual choice. If individuals prefer not to purchase goods from abroad, this is not a problem; but to encourage their government to compel them to do so would, indeed, create a problem. It would, in fact, violate the moral basis of the entire enterprise. (e) An increase in imports by a country like Japan would not make the problems of the rest of the world any easier. On the contrary, an increase in imports would, in the absence of a change in the balance between savings and investment, also increase exports, thereby increasing the adjustment problems of the rest of the world. (f) There is nothing surprising about specialization in trade, often referred to as the ‘laser beam’ approach. On the contrary, such specialization is exactly what trade is about.
The reasons for farm-support policies are summarized in Corbet, ‘Multilateral Negotiations on Agricultural Trade’, in Brian Davey, T.E. Josling and Alister McFarquhar (eds), Agriculture and the State (London: Macmillan Press, for the Trade Policy Research Centre, 1976) pp. 20–23.
D.G. Johnson, op. cit., pp. 249–66. Also see John Strak, Measurement of Agricultural Protection (London: Macmillan, for the Trade Policy Research Centre, 1982).
Agricultural Protection: Domestic Policy and International Trade, C 73/LIM/9 (Rome: Food and Agriculture Organisation, 1973).
Also see, John Strak, Measurement of Agricultural Protection (London: Macmillan, for the Trade Policy Research Centre, 1982).
On the question of how trade in services might be liberalized, see William E. Brock, ‘A Simple Plan for Negotiating on Trade in Services’, The World Economy, November 1982;
and Malmgren, ‘Negotiating International Rules for Trade in Services’, The World Economy, March 1985.
Services and the Development Process, Document TD/B/1008/Rev.1 (Geneva: UNCTAD Secretariat, 1985).
Some of the problems in broaching the subject are discussed in Stephen E. Guisinger, ‘Do Performance Requirements and Investment Incentives Work?’, The World Economy, March 1986.
Also see Guisinger et al., Investment Incentives and Performance Requirements: Patterns of International Trade, Production and Investment (New York: Praeger, 1985).
For a succinct review of the problems of dispute settlement in the GATT, see Guy Ladreit de Lacharrière, ‘Case for a Tribunal to Assist in Settling Trade Disputes’, The World Economy, December 1985.
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Viravan, A. et al. (1987). New Round of Multilateral Trade Negotiations. In: Trade Routes to Sustained Economic Growth. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18860-4_7
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