GATT in a conceptual vacuum

Getting under way a seventh round of international trade negotiations within the framework of the General Agreement on Tariffs and Trade (GATT) has been a long and arduous process.¹ The nub of the problem is the failure of political thought to keep pace with the rapid integration and growing interdependence of the world economy.     

GATT and the agricultural sector

The agricultural sector has to a large extent remained on the fringes of the process of trade liberalisation that has been going on for the last 25 years. The rules of the General Agreement on Tariffs and Trade (GATT) cover agricultural trade, but countries have found it expedient both to ask for derogations to protect their own domestic agicultural interests and also to be less rigorous in the enforcement of such rules even when derogations have not been requested.     

GATT’s role in East-West trade

After a phase of stagnation in East-West trade lasting several years, both sides have more recently been at pains to intensify economic relations between East and West, the reasons being both economic and political. What part can the General Agreement on Tariffs and Trade (GATT) play in this regard?     

The giant awakens: An interview with Professor Jagdish Bhagwati on economic reform in India

Few people are in a better position to reflect on the pace and substance of economic liberalization in India than Professor Jagdish Bhagwati. The author of four books on Indian economics, two on world trade, and an advisor to the Director General of the General Agreement on Tariffs and Trade (GATT), Bhagwati is an authority on the economic issues facing India today. Optimistic about India's future, he discusses the serious obstacles to liberalization that India has already overcome, and looks ahead to India's expanded involvement in world trade.     

Do WTO members have more liberal trade policy?

This paper uses 68 measures of trade policy and liberalization to ask if membership in the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) is associated with more liberal trade policy. Almost no measures of trade policy are significantly correlated with GATT/WTO membership. Trade liberalizations, when they occur, usually lag GATT entry by many years, and the GATT/WTO often admits countries that are closed and remain closed for years. The exception to the rule is that WTO members tend to have slightly more freedom as judged by the Heritage Foundation's index.     

Gatt regulation of countertrade: Issues and prospects

In light of persistent hard currency shortages, an increasing number of countries and firms resort to countertrade. Although this practice has the potential to become a major threat to the world trade framework, it is currently not specifically addressed by the General Agreement on Tariffs and Trade (GATT). From the context of the upcoming international trade negotiations, this article explores the extent to which countertrade practices are, and should be, incorporated into the GATT framework. It analyzes current GATT jurisdiction, presents policy considerations in favor of and against the inclusion of countertrade into the GATT, and addresses practical considerations to be kept in mind during negotiations on this issue.     

Intellectual property rights: Changing levels of protection under GATT NAFTA and the EU

Revisions in the laws protecting intellectual rights have occurred across the board in the General Agreement on Tariffs and Trade (GATT), the European Union (EU) and the North American Free Trade Agreement (NAFTA). Chaudhry and Walsh focus on the eurrent problem of patent piracy in the pharmaceutical industry and the effect these changes have on this sector.     

Relative prices and wage inequality: evidence from Mexico

This paper examines the link between relative goods prices and relative wages during two periods of Mexico's trade liberalization. The relative price of skill-intensive goods rose following Mexico's entrance to the General Agreement and Tariffs and Trade (GATT) in 1986, but fell after Mexico entered the North American Free Trade Agreement (NAFTA) in 1994. This paper adds a band pass filter to two established techniques to compare the relationship between prices and wages. Results from all three approaches are consistent with a positive long-run relationship between relative output prices and relative wages. The band pass filter results suggest that the relevant time frame for the relationship begins after 3-5 years.     

The Dispute Settlement Mechanism of the WTO: A Brief History and an Evaluation from Economic,Contractarian and Legal Perspectives

Any rule‐based system has to include a mechanism for the enforcement of its rules and a means for settlement of disputes about alleged violation of rules. The General Agreement on Tariffs and Trade (GATT), concluded in 1947, and its successor the World Trade Organisation (WTO) that subsumed it in 1995, embody rules governing the global trading system as specified in various agreements that their members have entered into over time. Naturally, both had a dispute settlement mechanism (DSM). It was a primarily political one in the GATT and was transformed into a largely legalistic one in the multilateral agreement that established the WTO. This paper reviews the history and evaluation of the two DSMs and examines their efficiency based on appropriate criteria. It views them from three alternative and overlapping perspectives: political‐diplomatic, legal‐economic and social. It concludes with a discussion of the unresolved problems in the operation of the WTO's DSM and the prospects of resolving them in the ongoing Doha Round of multilateral trade negotiations.     

Modelling the Extensive Margin of World Trade: New Evidence on GATT and WTO Membership

Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO) membership does promote bilateral trade, at least for developed economies and if membership includes non‐formal compliance. We review the literature to identify open issues. We then develop a simple extension of the gravity model that gives rise to an extensive country margin of trade separating positive trade from zero trade country pairs. The model is used to identify WTO membership effects at both the intensive and the extensive margins. Empirical estimation of this model, based on Poisson pseudo‐maximum likelihood methods with exporter and importer fixed effects, allows us to readdress the empirical issue of whether GATT/WTO membership does or does not promote trade. We find that GATT membership was successful on the extensive margin of world trade but not on the intensive margin. For the recent WTO episode (1995–2008), we find consistent and robust evidence for a substantial trade‐creating role of membership which is driven primarily by the intensive margin. WTO membership results in higher bilateral trade of about 40 per cent.     

Keen competition in East-West trade

Parallel to the economic growth and the increase of the living standards in the Eastern bloc the import requirements of its member countries are rising, too. For this reason all Western industrial nations make increasing efforts to establish themselves in these markets with good future prospects or to maintain and extend traditional positions. However, trade between the East and the West is more difficult than among Western industrial States. The differing control of the economies causes a multitude of difficulties in opening new business connections and for transactions. These impediments are still increased by differing conceptions of the world. INTERECONOMICS interviewed Herr Alfree E. Schulz, Member of the Board of Directors of DEMAG Aktiengesellschaft, on the present situation of the West Germon Eastern trade.     

世界经济三大支柱的比较研究

被誉为世界经济三大支柱的关贸总协定、国际货币基金组织和世界银行，自成立以来，已经历了半个世纪的风风雨雨。它们都对二战后世界经济的复苏和振兴起到了举足轻重的作用。但是，关贸总协定及世界贸易组织发展更为迅猛，并从三大支柱中脱颖而出。展望世界经济发展前景，惟有加强三大支柱的协调与合作。世界经济才能鼎足而立。     

The WTO,the Environment and Health and Safety Standards

The World Trade Organization (WTO) is a product of the General Agreement on Tariffs and Trade (GATT). The WTO was created in the last round of negotiations (Uruguay Round, 1986‐94) to provide a stronger set of institutions to administer the various agreements negotiated under the GATT framework. Because the WTO is more powerful than its predecessors, critics claim that it poses a threat to national sovereignty. Concerns about the ability of nations to set their own environmental and health and safety agendas have figured prominently in these critiques. In addition, critics suggest that the WTO prioritises trade objectives at the expense of environmental and health and safety objectives. The article explores the extent to which the WTO has been able to reconcile trade, environmental and health and safety objectives by analysing its rulings on these matters. Overall, this analysis suggests that the WTO dispute resolution process has balanced all three sets of objectives. However, it is important to note the small number of disputes to date; only 21of the 175 disputes before the WTO involve environmental and health and safety matters. Further, the WTO has issued decisions in only six of these cases.     

Trade Liberalisation and Economic Performance: Theory and Evidence for Developing Countries

The last five decades have witnessed a profound evolution of economic policy in developing countries, particularly in the case of trade strategies. Both internal, as well as external, factors have prompted the need for more outward‐oriented (or liberalised) trade policy regimes. The creation of the General Agreement on Tariffs and Trade (GATT) in 1947 and the World Trade Organisation (WTO) in 1995 have been important driving forces for free trade. Since then, the major quantitative barriers to trade, i.e. tariffs and non‐tariff barriers (quotas, licences and technical specifications, among other restrictions), have substantially been reduced or dismantled. Also, the progress towards more liberalised trade regimes, mainly in developing countries, has been manifested in the trade and development literature. Major studies suggest that the performance of more outward‐oriented economies is superior to that of those countries pursuing more inward‐looking trade practices (Greenaway and Nam, 1988; Dollar, 1992; Sachs and Warner, 1995; and Rodríguez and Rodrik, 2000). Recent developments in the international trade literature focus on the potential dynamic effects of trade liberalisation, i.e. simplification of tariff structures and elimination of non‐tariff barriers, in reducing the incentives to rent seeking and in accelerating the flow of technical knowledge from the world market. Moreover, there have been important advances regarding the study of trade liberalisation and its impact on exports, imports and the balance of payments, largely neglected in the literature, often driven by supply‐side considerations.     

Chances for a pacific free trade area

The establishment of the EEC was a major event of the 1960s. It has had a significant impact on international trade and investment and has wrought a profound change in the world balance of economic power. The emergence of the enlarged EEC and the implementation of a Pacific Free Trade Area (PAFTA) could have a more profound influence in shaping the world of the 1970s.     

UN development strategy for the eighties

The recently held 11th Special Session of the UN General Assembly reached agreement on an international strategy for the Third Development Decade which is to be formally passed by the current 35th General Assembly. In the discussion it became obvious that the developing countries’ interest still focusses on a New International Economic Order. There are however grave doubts about the possibility of reaching, by institutional reforms, a real solution for the development problems to be faced in this decade.     

1974: World population year

In December 1970, the General Assembly of the United Nations designated 1974 as World Population Year. Herewith, the Assembly was giving recognition to the growing involvement of the United Nations System in the population field and to the need for focussing international attention on different demographic aspects.     

Tariff Liberalisation and the Growth of World Trade: A Comparative Historical Analysis of the Multilateral Trading System

The aims of this study are to assess the relationship between tariff barriers and world trade growth from a comparative and historical perspective, and to derive some useful indications for evaluating the effectiveness of the current multilateral trading system for promoting world trade. The novelty of this work is the complex reconstruction of a historical tariffs and trade series for the period 1870–2000, for 23 countries; this constitutes a good proxy for world trade (accounting for over 60 per cent) in this period. The effect of tariff liberalisation on trade growth is analysed empirically using panel data and time series. The results, while confirming the existence of a world level long‐term relationship between tariff reductions and trade growth, demonstrate how this substantial and significant relationship pre‐World War II gradually diminished in importance and significance after 1950. This result does not conflict with the key role of the General Agreement on Tariffs and Trade/World Trade Organization system in trade liberalisation; however, it underlines the importance of a formalised multilateral trading system, not so much for tariff liberalisation, but for building a virtuous process of international coordination of trade policies and ensuring fuller participation in world trade.     

A concept for an Open World Economy

One of the many new publications dealing with the reform of the International trade system is the report of the Trade Policy Research Centre “Towards an Open World Economy”. The following article analyses and criticlses the main proposals of the report.     

A new departure in international commodities policies?

In the course of the last United Nations' World Trade Conference (UNCTAD) the Soviet Union, Ivory Coast and Bulgaria signed the agreement on the Common Fund for Commodities. The Fund, which was conceived as the cornerstone of a new international commodities policy, will thus come into effect in the near future, probably in the course of 1988. Will this leadt o a new departure for international commodities policies?