AEM2300 Lecture11 Spring 2009

AEM2300 Lecture11 Spring 2009 - Lecture 11 General...

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Lecture 11 1 of Professor David Lee AEM-ECON 2300 General Agreement on Tariffs and Trade (1947) Multilateral agreement to decrease trade barriers and assure equal treatment among member countries 8 negotiating rounds between 1947 and 1994 Key principles of GATT : Non-discrimination : acceptance of most-favored nation principle ; extension to all member nations the most favorable treatment given to any single member. Regional trading arrangements an exception Elimination of non-tariff trade barriers , such as import quotas, export subsidies, etc., which are more trade-distorting and can be used to discriminate against specific countries Exceptions: agricultural products, nations in balance of payments difficulties
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Lecture 11 2 of Professor David Lee AEM-ECON 2300 General Agreement on Tariffs and Trade (1947) Encourage resolution of trade disputes through consultation, complaint procedures and conciliation panels But no authority to enforce dispute panel’s recommendations (until formation of World Trade Organization)
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Lecture 11 3 of Professor David Lee AEM-ECON 2300 Reductions in Tariffs under GATT (%) Ave. Reduction Ave. Reduction Residual (encumbered (all products) Tariffs Round products) (% of 1930) Pre-GATT (1930-47) 44.0 33.2 66.8 Geneva (1947) 35.0 21.1 52.7 Annecy (1949) 35.1 1.9 51.7 Torquay (1950-51) 26.0 3.0 50.1 Geneva (1955-56) 15.6 3.5 48.9 “Dillon” (1961-62) 12.0 2.4 47.7 Kennedy (1964-67) 45.5 36.0 30.5 Tokyo (1974-79) -- 29.6 21.1 Uruguay (1986-93) -- 33.0 14.2 (est.)
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Lecture 11 4 of Professor David Lee AEM-ECON 2300 U.S. Average Tariff Rates on Dutiable Imports, 1900-1996
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Lecture 11 5 of Professor David Lee AEM-ECON 2300 Uruguay Round Tariff Reductions on Industrial Products by selected countries Source: “Uruguay Round Outcome strengthens framework for trade relations”, IMF Survey , November 1994, p.355 country Pre-Uruguay Round  average tariff rate Post-Uruguay Round  average tariff rate Industrial countries 6.0 3.6 Australia 20.1 12.2 Canada 9.0 4.8 European Union 5.7 3.6 Japan 3.9 1.7 United States 5.4 3.5 Developing countries Argentina 38.2 30.9 Brazil 40.7 27.0 Chile 34.9 24.9 Colombia 44.3 35.3 India 71.4 32.4 Korea 18.0 8.3 Malaysia 10.0 9.1 Sri Lanka 28.6 28.1 Thailand 35.8 28.1 Average tariff rate (percent)
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Lecture 11 6 of Professor David Lee AEM-ECON 2300
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