Does the WTO Make Trade More Stable?

I examine the hypothesis that membership in the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) has increased the stability and predictability of trade flows. I use a large data set covering annual bilateral trade flows between over 175 countries between 1950 and 1999, and estimate the effect of GATT/WTO membership on the coefficient of variation in trade computed over 25-year samples, controlling for a number of factors. I also use a comparable multilateral data set. There is little evidence that membership in the GATT/WTO has a significant dampening effect on trade volatility.JEL Classification Number: F13     

日本入关后对外贸易政策演变述析

日本入关后在经济贸易发展的过程中,政府强有力的宏观调控发挥了很大的作用,日本政府主导了对外贸易的发展及对外贸易政策的制定和实施。入关后,日本政府充分利用了关贸总协定(GATT)相关条款,一方面通过实施保护贸易政策为国内竞争力较弱的产业提供了充分发展的时间和市场空间;另一方面也实施了贸易和投资逐步自由化的政策。日本入关后到上世纪70年代中期以前实施的初级阶段战略性贸易政策是相当成功的,随后实施的高级阶段战略性贸易政策并没有取得很好地进一步提升日本经济实力的效果。     

Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade

This paper explores the proliferation of Fair Trade organizations, their products, services and client groups in order to establish the impact of this movement. Although small in volume, alternative trade represents a unique response to the relentless pursuit of free trade through the GATT/WTO process. The economic underpinnings of both Fair Trade and subsidy programs in general (such as the EU's Stabilization of Exchange system) are evaluated. Ultimately, alternative trade can provide significant assistance to targeted groups within developing countries, including gains in production and export proficiency. On the negative side, Fair Trade is likely to prolong the dependence of developing countries on products with poor future prospects.     

Antidumping as Strategic Trade Policy under Asymmetric Information

Trade liberalization under GATT/World Trade Organization (WTO) has been partly offset by an increase in antidumping protection, possibly due to the inclusion of sales below cost in the definition of dumping. This article investigates the domestic government's antidumping duty choice in an asymmetric information framework, in which the foreign firm's cost is observed by the domestic firm, but not by the government. We show that by designing a tariff schedule contingent on firms' cost reports and accompanied by a threat to collect additional information for report verification, the domestic government may not only be able to extract the true cost information, but also succeed in implementing the full‐information, governmental welfare‐maximizing duty. The antidumping framework within GATT/WTO may thus not only offer the means to pursue strategic trade policy disguised as fair trade policy, but it also helps overcome informational problems with regard to correctly determining the optimal strategic trade policy.     

世界贸易组织贸易救济措施与战略性贸易政策

世界贸易组织是独立于联合国中以法律为基础的、全球最大的多边贸易体制的组织。众所周知,关贸总协定历经八年商谈,最终结果为关税大幅度降低同时并限制一些补贴的使用,这些措施均对成员方的战略性贸易政策的实施起到一定的限制作用。本文据此分析了世界贸易组织的贸易救济措施以及战略性贸易政策。     

Asia/Pacific Regional Trade Agreements: An empirical study

At the same time as the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have been encouraging trade liberalized, there has been a proliferation of Regional Trade Agreements (RTAs). These RTAs also aim to reduce trade barriers, but they do so it in a preferential way. There is continued debate as to whether such RTAs are an effective way of achieving free trade, or if increased trade among members causes less trade with non-member countries? If RTAs increase total trade, this is known as ‘trade creation’, whereas if the extra trade occurs at the expense of non-members, this is called ‘trade diversion’. Trade creation implies improved welfare, whereas ‘trade diversion’ may adversely affect welfare. This paper examines five different RTAs using a gravity model to see if they have been trade creating or trade diverting. Annual data from 26 countries covering five RTAs in the Asia and Pacific region for the years 1980–2000 was used.The results show that the effects of the different RTAs varied remarkably. The Association of South East Asian Nations (ASEAN) and the Australian and New Zealand Closer Economic Relations (CER) fostered greater trade with trading partners and with the rest of the world. While the Asian Pacific Economic Cooperation (APEC), the Southern Cone Common Market (MERCOSUR) and the North American Free Trade Association (NAFTA) tended to be trade diverting, that is, they expanded intra-bloc trade at the expense of trade with others.     

Trade Policy in Canada and Australia in the Twentieth Century

The paper provides an analytical comparison of the evolution of trade policy in Canada and Australia and of the two countries' roles in international trade diplomacy. Despite similarities in history and resource endowment, these roles have differed substantially, especially during the third quarter of the twentieth century. The focus is on the reasons why Canadian and Australian attitudes and policies differed so markedly. The importance of the USA as a trading partner, differing economic experiences during the decade of the 1920s, and the more concentrated composition of Australian exports all played a part. Once in train, the position that Australia was different and need not participate in GATT tariff cuts as long as agriculture was excluded became the inertial position, while Canada played an active role in GATT's early development. After 1973 Australia's position as an outlier among high-income countries' trade policies was reversed, and Australian and Canadian trade policies again became similar in the 1980s.     

A Re-Examination of the Effect of GATT/WTO on Trade

The empirical literature on the effect of the GATT/WTO on trade provides ambiguous results. This paper sheds new light on this issue by re-examining the ex post (partial) effect of GATT/WTO membership on trade using multiple econometric specifications of the gravity equation and analysing several potential asymmetries of the GATT/WTO system. Our results show an uneven but pervasive evidence that membership in GATT/WTO have had an economically significant effect on members’ bilateral trade. Moreover, we find that the GATT/WTO effect operates through both trade margins but mainly through the intensive margin.     

Extent and evaluation of protection in developing countries

Tariff protection and nontariff barriers are higher in developing countries than in industrial nations. The tendency of protection to decline with a higher level of development can be explained by the role of import taxes in government revenue, by export pessimism, and by differential treatment of developing countries under GATT.Protection against imports is a burden on the export sector. Trade liberalization has important effects on economic growth and factor productivity. Recent programs of trade liberalization are implemented together with complementary macroeconomic policies to enhance the possibility of sustaining trade policy reforms to be sustained.     

Protection and international stability

Summary Since World War II trade negotiations under GATT reduced tariff protection to one-eighth of its pre-war level. From the mid 1970s however, protection increased again, in particular non-tariff barriers were being used. Furthermore, strategic trade policies use subsidies and other non-border protective measures. Protection prevents the world economy from gaining full benefits from specialization combined with expansion of trade. Unlike tariffs, non-tariff barriers fragment the market and encourage a bilateral approach in negotiating trade agreements. Strategic trade policies are difficult to apply properly and may evoke retaliation. Nondiscrimination is the main principle of GATT, on which the present international trading system is based. In order to maintain it, trade negotiations under GATT will hopefully lead to international consensus on the proper use of non-tariff barriers and instruments of strategic trade policies.[/p]     

The common external tariff of a customs union: Alternative approaches

The most prominent exception to the cardinal ‘most favoured nation’ principle of the General Agreement on Tariffs and Trade (GATT) of 1947 is in its Article XXIV relating to Customs Unions (CUs) and Free Trade Areas (FTAs). This article required, first, the general incidence of the duties and regulations of commerce imposed by members of the CU with respect to trade with non-members shall not on the whole be higher or more restrictive than those that were applicable prior to the formation of CU or FTA, and, second, that substantially all the trade among members be free. Neither requirement was very operational, because the phrases ‘general incidence’ and ‘substantially all’ being difficult legal concepts to apply. The agreement of 1994 establishing the World Trade Organization (WTO) has made ‘general incidence’ precise by defining it import-weighted average of height of barriers but without offering any rationale for the definition. Now that preferential trading arrangements such as FTAs are proliferating, reform of Article XXIV is of importance. This paper describes alternative approaches to the central question of common external tariffs of a CU. Taking off from the work of Kemp and Wan who showed the existence of a common external tariff of CU that keeps the welfare of non-members unchanged while revising that of the CU as compared to the situation prior to the formation of CU, it characterizes such a tariff structure for two leading benchmark examples as consumption-weighted average of pre-union tariffs and subsidies in the member countries.     

Globalization and Regionalization – Taiwan's Perspective

If Taiwan becomes a member of GATT, she can pursue the multilateral free trade agreement provided by the GATT framework. Nonetheless, regionalism is rising. Taiwan may be able to benefit from the great potential of the single European market. However, this prospect is diluted by the EC's concentration on intraregional trade and its frequent use of protectionist measures. The development of NAFTA will not have a substantial diversion effect on Taiwan, though the situation may vary from industry to industry. A Pacific free trade area should be an objective for countries in this region. However, a flexible strategy should be adopted in order to reach that goal. This is especially true for Taiwan.     

Best practices for regional trade agreements

Complicated web of hub-and-spoke type of overlapping free trade agreements (FTAs) can result in high costs for verifying rules of origin (RoO) and trade diversion or suppression effects. This paper attempts to provide best practices for regional trade agreements (RTAs) to enhance global free trade by mitigating these negative effects. By adopting a gravity regression analysis, we quantitatively estimate the trade creation and diversion effects of cumulated RoO (bilateral, diagonal, and full cumulation) for RTAs established under GATT Article XXIV and under the Enabling Clause. We find that (i) RTAs, in general, create trade among members and divert trade from nonmembers, whereby the net trade-enhancing effect is rather weak; (ii) RTAs should be established under the comprehensive GATT Article XXIV, rather than the piecemeal Enabling Clause; and (iii) full cumulation is the most optimal provision in terms of creating the most intra-bloc trade and diverting the least extra-bloc trade. Overall, we strongly suggest that RTAs should employ full cumulation of RoO under GATT Article XXIV.     

国际贸易机制对国内武装冲突影响的研究——基于回归断点设计的数量分析(1946-2009年)

国际机制不仅影响国家行为体,也影响国家层面之下的非国家行为体,并作用于两类行为体间的互动。作为最为成熟也是影响范围最为广泛的国际机制之一,国际贸易机制一方面通过机制功能作用于国内政治中的国家行为体与非国家行为体,另一方面施加影响于贸易议题从而刺激国内各行为体之间的互动。无论是机制还是贸易都与国际和平战争研究紧密相关,如"贸易和平论"与"国际制度和平论"。基于国际原因与国内产出之间的关系,国际贸易机制如何影响国内政治,特别是影响国内冲突的爆发风险?通过回归断点设计(RDD)与Logit回归分析,1946-2009年之间的国际贸易机制(关贸总协定/世界贸易组织)数据及国内武装冲突数据显示,关贸总协定/世界贸易组织成员资格的确能够在整体上显著降低国内武装冲突发生的可能性;但是,在分别控制经济因素、政治因素、社会因素、贸易因素和外部因素之后,实证结果显示国际贸易机制对各国国内冲突风险实际上是一种条件性的混合影响。     

Special gains from trade with socialist countries: The case of Tanzania

Trade does not necessarily benefit all trading partners and heavy dependence on trade is a precarious matter. Trade with socialist countries could confer special advantages on Third World trading partners thus making a net benefit more likely. However this requires conditions in which trade ceases to be ‘mere exchange of commodities’ and becomes an element of planned economic integration. Given a non-planned Third World country like Tanzania and given recent approaches to international trade by most socialist countries, it is not surprising that Tanzania is shown to have derived no particular benefits from its trade with the socialist countries. The trade was merely an exchange of commodities, with the possible exception of the trade with China.     

Trade and Competitiveness of African Economies in the 21st Century

One of the major challenges that may be confronting sub–Saharan African (SSA) economies in the 21st century is that of a changing North–South trading structure. An earlier study (Olofin, 1995), tried to show that close to the turn of the century, the SSA countries remained the only group of countries whose exports were predominantly primary products, complemented by trade in manufactured imports. In virtually every other region of the world, this pattern of trade had changed to a more competitive one. Most other nations had moved progressively away from primary exports to manufactured exports of the labour intensive type, and subsequently to more resource intensive manufactures. The single major development that has reshaped the terrain for global trade, and which will significantly influence the course of trade and international competitiveness in the 21st century, is the Uruguay Round (UR) negotiations. It produced the 1994 General Agreement on Tariffs and Trade (GATT), and the subsequent World Trade Organization (WTO) treaty. Various analyses have shown (Sorsa, 1997) that the overall impact of UR trade liberalization on SSA countries may be quite insignificant at least in the short run. This is primarily because many of the provisions of the resulting WTO treaty do not cover the bulk of African trade, especially in respect of their exports. However, there is hardly any doubt that the GATT 1994/WTO treaty and its provisions would define the stage for global competition in production and trade in the 21st century. If SSA countries are not to be marginalized in the scheme of things over the medium to longer term, they will of necessity have to respond, if not to the immediate effects of the treaty on trade and competitiveness, at least to its longer–term ramifications. The resulting patterns of trade and competitiveness are likely to have far–reaching effects on the prospects for evolving a viable strategy for sustainable growth and development in these countries. The primary objective in this paper, therefore, is first to examine some of the implications of the outcome of the Uruguay Round negotiations for the external trade of sub–Saharan African countries as a bloc. Secondly, to identify some of the major obstacles to their competitiveness; and thirdly as a consequence, to be able to arrive at some form of research agenda, that should engage the attention of researchers and policy–makers alike within the region in the near to medium term. This is crucial, if appropriate policies are to emerge towards addressing the growing concerns on African marginalization in the face of increasing globalization. Les changements dans la structure des échanges entre le Nord et le Sud sont l’un des principaux défis auxquels les économies d’Afrique subsaharienne pourraient Átre confrontées au cours du 21ème siècle. Dans une étude précédente (Olofin, 1995), nous avons tenté de montrer qu’au tournant du siècle, l’Afrique subsaharienne reste l’unique région du monde dont les exportations sont essentiellement composées de produits primaires, complétées par des importations de produits manufacturés. Les négociations de l’Uruguay Round sont le seul élément nouveau majeur qui soit à l’origine de la recomposition de la physionomie du commerce mondial et qui exercera une influence significative sur l’évolution des échanges et de la compétitivité internationale au 21ème siècle. Ces négociations ont débouché sur l’Accord général sur les tarifs et le commerce (GATT) de 1994 ainsi que sur le traité subséquent relatif à l’Organisation mondiale du commerce (OMC). Diverses analyses (Sorsa, 1997) ont montré que la libéralisation du commerce, négociée dans le cadre de l’Uruguay Round, n’aura qu’un impact global mineur sur les pays d’Afrique subsaharienne, au moins à court terme. Le présent document examine l’évolution consécutive aux principaux accords internationaux régissant le commerce et le transfert de technologie. Il analyse ensuite le manque de compétitivité des prix des exportations traditionnelles africaines et définit la nature des défis que les pays subsahariens devront relever en vue de devenir compétitifs dans une économie mondiale en constante mutation, durant le 21ème siècle et au–delà. Ces défis sont présentés sous la forme d’un guide sur le programme de recherche que la communauté des chercheurs s’intéressant au développement de l’Afrique devra nécessairement réaliser afin de trouver des solutions efficaces au problème de la marginalisation du continent et de sa compétitivité décroissante dans l’économie globale.     

Trade in Services in the Asia-Pacific Region

After a discussion of definitional issues, such as the distinction between sales of services from the home base and from offshore establishments, the article surveys the literature on various policy issues in relation to trade in services, including those associated with the incorporation of services in the GATT, as well as others concerned with particular sectors. The article documents from the literature that developing countries can be internationally competitive suppliers of many services, which suggests that they stand to gain from a more liberal service trade regime.     

Econometric Analysis of the India–Sri Lanka Free Trade Agreement*

This paper investigates whether the India–Sri Lanka Free Trade Agreement (ISLFTA) has had trade creation or trade diversion effects on the rest of the world. Using data on tariffs at the six‐digit level of the Harmonized System classification for the period 1996 to 2006, the methodology of the present paper follows a study on the North American Free Trade Agreement by Romalis (2005 ) We use the commodity and time variation in the tariff preferences allowed under ISLFTA to identify its effect on sourcing of different products from the ‘control country’ to the ISLFTA region. Using a fixed effects model, we find that the ISLFTA has had small trade creation effects in the control countries.     

试论推动日本加入关贸总协定的政治因素

日本加入关贸总协定,并非是简单的经济行为,其中,政治方面的因素不容忽视,这主要表现在：一,在国际上,从东亚冷战战略出发,美国对日本经济状况的考虑,使它极力主张日本入关;二,在国内,日本社会党在对外贸易上的不同看法,对保守党政府造成相当大的压力,迫使它通过入关来振兴经济,从而巩固在国内的统治,在这两种因素的推动下,日本顺利地完成了在入关过程中最关键的与美国的关税谈判,获得了美国政府的巨大让步,政治对经济的强大反作用力,最终物化成看得见的经济红利。     

Commanding the Middle: The American Agenda at the Kennedy Round

The Kennedy Round of GATT was an opportunity for Australia and New Zealand to achieve their commercial interests of expanding agricultural exports and adjusting trade flows to the power of the United States, the loss of preferential markets in Britain and the new presence of the European Common Market. Both found commonalities with America, both managed to assert some of their concerns, but both also were decidedly junior and weaker partners to the free-trading United States in the GATT regime. The issues explored in this article range from trade in commodities to the protests of the Third World.