lec17-eco101-11

lec17-eco101-11 - InternationalTrade Lecture17 c ⃝...

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Unformatted text preview: InternationalTrade Lecture17 c ⃝ Marc-AndreasMuendler UniversityofCalifornia,SanDiego November29,2011 17.TradeAgreements Econ101, c ⃝ M.Muendler TheInternationalandHistoricContext • Inthe1930s,theSmoot-HawleyacttemporarilyreversedU.S.com- mitmenttoremovaloftradebarriers • SinceWorldWarII,tradebarriershavebeenreducedglobally • ProcessmostlydrivenbyU.S.andEuropeancountriesuntilaround 1980.Sincethen,morecountrieshavebeenpartofrounds • MostrecentDoha(Qatar)roundspeaksofa“DohaDevelopment Agenda”throughtradepromotion. 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 (exceptwhenimportsthreaten‘marketdisruption’) – 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-tradedrivenPrisoners’Dilemma – Production-relocationdrivenPrisoners’Dilemma • Welfareimprovingtradenegotiations:facegovernmentswithincen- tivesthatleadtogloballyefficientleveloftradeprotection • Curiousimplication:eachgovernmentneedsnegotiations;notinany government’sself-interesttoadoptunilateraltradeliberalization 17.TradeAgreements17....
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This note was uploaded on 01/30/2012 for the course ECON 101 taught by Professor Jacobson during the Fall '03 term at UCSD.

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lec17-eco101-11 - InternationalTrade Lecture17 c ⃝...

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