lec17-eco101-10

lec17-eco101-10 - InternationalTrade Lecture17 c...

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Unformatted text preview: InternationalTrade Lecture17 c Marc-AndreasMuendler UniversityofCalifornia,SanDiego November30,2010 17.TradeAgreements Econ101, c M.Muendler TheInternationalandHistoricContext Inthe1930s,theSmoot-HawleyacttemporarilyreversedU.S.com- mitmenttoremovaloftradebarriers SinceWorldWarII,tradebarriershavebeenreducedglobally ProcessmostlydrivenbyU.S.andEuropeancountriesuntilaround 1980.Sincethen,morecountrieshavebeenpartofrounds MostrecentDoha(Qatar)roundspeaksofaDohaDevelopment Agendathroughtradepromotion. Dohaagreementprovidesbasicnegotiationagendaandstructure 17.TradeAgreements Econ101, c M.Muendler TheGATTandWTO GATT:GeneralAgreementonTariffsandTrade (voluntarynegotiatingforum) MultinationaltariffreductionssinceWorldWarIIhavetakenplace mostlyundertheGATT(since1947) UponconclusionoftheUruguaytraderound,GATTbecameWorld TradeOrganization(WTO) GATT-WTOsystemoffersbindingsetofrulesofconduct WTOaddsexplicitsettlementmechanismfortradedisputes 17.TradeAgreements Econ101, c M.Muendler TradeRounds Agroupofcountriesnegotiatesmeasurestoreducetradebarriers Eighttraderoundswerecompletedsince1947 Thefirstfiveroundstooktheformofparallelbilateralnegotiations Thesixthround,knownastheKennedyRound,resultedinamul- tilateralagreementin1967withanaverage35%tariffreduction Theseventhround(TokyoRound)resultedinamultilateralagree- mentin1979withtariffreductionsandVERcontrols Theeighth(Uruguay)RoundresultedintheGATT-WTOin1994 17.TradeAgreements Econ101, c M.Muendler GATT-WTORules WTOprohibitstheimpositionof Exportsubsidies (exceptforapeaceclauseonagricultureuntil12/2003) Importquotas (exceptwhenimportsthreatenmarketdisruption) Importtariffs (40%reduction,includingagricultureandclothing;anynewtar- iffortariffincreasemustbeoffsetbyreductionsinothertariffstocompensate theaffectedcountries) WTOsettlementandpunishment:TheWTOservesasanarbiter. Countriesfoundtoviolatetheprovisionsmaybesanctionedthrough tariffsonanyoftheirexportgoods 17.TradeAgreements Econ101, c M.Muendler UnequalBenefitsoftheUruguayRound OECDestimatesthatworldeconomygains$200billionayear Acrosscountries,industrializedeconomiesmayhavegainedmost Rulesonservices(GATS:GeneralAgreementonTradeinServices)andinterna- tionalpropertyrights(TRIPS:Trade-relatedaspectsofIntellectualPropertyRights) Inkeysectorsfordevelopingcountries,barrierswerenotremoved (Agriculture,cotton,sugar,steel) Subramanian&Wei(2003):GATT/WTOmembershipraisestrade volumesfordevelopedcountriesbutnosystematiceffectondevelop- ing-countrymembers 17.TradeAgreements Econ101, c M.Muendler WhyInternationalTradeNegotiations? Whatfundamentalissuedointernationaltradenegotiationsaddress? Terms-of-tradedrivenPrisonersDilemma Production-relocationdrivenPrisonersDilemma Welfareimprovingtradenegotiations:facegovernmentswithincen- tivesthatleadtogloballyefficientleveloftradeprotection Curiousimplication:eachgovernmentneedsnegotiations;notinany governmentsself-interesttoadoptunilateraltradeliberalization 17.TradeAgreements17....
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This note was uploaded on 05/01/2011 for the course ECON 101 taught by Professor Jacobson during the Spring '03 term at UCSD.

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lec17-eco101-10 - InternationalTrade Lecture17 c...

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