Mobility, Diversification, and Sustainability of Trade Reform
The discussion of the benefits of free trade is almost as old as the economics profession itself. Countries that have achieved free trade through policy reform almost inevitably succumb to protectionist policies after a period of free trade. Despite numerous successful initiatives for trade reform, interest groups seek and often eventually achieve protection. The trend toward increased protectionism continues until the economy-wide need for reform is sufficient to motivate a successful initiative for reform. The Uruguay round of negotiations of the General Agreement on Trade and Tariffs (GATT) represents a significant initiative in potential multilateral economic reform. The fact that it is the fourth round of negotiations for GATT is an indication of the difficulty in achieving reform which is sustainable.
KeywordsFree Trade Resource Mobility Rent Seek Export Sector Factor Share
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