Showing papers in "The World Economy in 1988"

Is Non‐discrimination Really Dead?

Abstract: ‘The most-favored-nation clause in American commercial treaties, as conditionally interpreted and applied by the United States, has probably been the cause in the last century of more diplomatic controversy, more variations in construction, more international ill-feeling, more conflict between international obligations and municipal law and between judicial interpretation and executive practice more confusion and uncertainty of operation, than have developed under all the unconditional most-favored-nation pledges of all other countries combined’— Jacob Viner, in the Journal of Political Economy (February 1924)

Constructing a Constitution for Trade in Services

Abstract: HE NEED for some kind of international coordination and cooperation concerning trade in services across borders has become apparent. While there exists an international legal framework (albeit troubled and evolving) for trade in goods, there is very little such framework for trade in services, except in certain specific industries. Services make up a greater percentage of the gross national product (GNP) of major industrialized countries than the production of goods and they also comprise a significant percentage of world trade. These considerations were among those which led the contracting parties to the General Agreement on Tariffs and Trade (GATT) to include provisions for negotiating agreements on trade in services in the declaration issued after the special ministerial meeting, held in September 1986 at Punta del Este, that launched the Uruguay Round of multilateral trade negotiations, the eighth such round in the forty-year history of the GATT. ’ Because of the great variety of service activities, because they often do not involve tangible property and because it is sometimes difficult or impossible to identify when a service ‘crosses a border’, the national or international regulation of service activities is very difficult. For similar reasons, it will be very difficult to develop a new legal framework for trade in services. The GATT model is often cited as a possible approach. Because of the great differences between trade in services and trade in goods, however, it is quite doubtful whether the GATT model could be followed very closely. The purpose of this article is to explore, in the context of the Uruguay Round negotiations, the possible legal-institutional structure which could be used to develop an international discipline on trade in services and to compare such a structure with the GATT model. The ideas and reflections expressed in the article stem partly from considerable discussion about trade in services with other scholars, government officials and policy makers. No special claim to originality for many of these ideas is made,

Services as the Quid Pro Quo for a Safeguards Code

Abstract: HE General Agreement on Tariffs and Trade (GATT), like other internaa tional agreements, is replete with ‘safeguards’ or ‘escape clauses’. l The main one, set out in Article XIX, permits the introduction of emergency protection against a sudden surge of imports of a particular product. But the provision has proved to be inadequate and is not invoked very often. Governments have found ‘informal’ discriminatory arrangements, negotiated bilaterally outside the GATT system, a more attractive alternative. For developing countries, in particular, the reform of the multilateral safeguard system is of great importance. * Indeed, it can be argued that the lack of effective discipline on emergency protection undermines considerably the value of GATT membership for developing countries. The failure of the talks on a new safeguards code during the Tokyo Round of multilateral trade negotiations, conducted under the auspices of the GATT in 1973-79, certainly devalued the achievements of that round. What is at stake for developing countries is access to markets of developed countries. As the adherence to the GATT principle of non-discrimination diminishes, uncertainty regarding future access to markets increases, specialization according to comparative advantage is made more difficult and production and consumption decisions become distorted. In September 1986, at Punta del Este, the member countries of the GATT agreed to launch a new round of multilateral trade negotiations, the Uruguay Round. The agenda covers familiar topics such as trade in manufactured and agricultural products, ‘unfinished business’ from the Tokyo Round negotiations (including safeguards) and new topics such as trade in services, intellectual property rights and trade-related investment measures. The Uruguay Round negotiations offer another chance to reach an effective agreement regarding the imposition of emergency protection. It is unlikely, however, that developing countries, which have the most to gain from multilateral discipline on safeguard actions, will be able to secure an agreement along the lines they would prefer if

Consistency of Export-restraint Arrangements with the GATT

Abstract: ORTY years of stressful history would challenge the capacity of any international agreement on trade and commerce to cope with new developments and practices not carefully enough contemplated by the original draftsmen. The General Agreement on Tariffs and Trade (GATT)’ is no exception. Indeed, the lack of an adequate institutional structure for the GATT’ renders it even more vulnerable than many agreements to the problem of ‘relevance’ in a world now substantially different from the one which existed in the immediate post-World War I1 period. Yet few practices have posed as large a problem for the policy objectives and ‘rule’ language of the GATT as those generally called ‘voluntary export restraints’ (VERs), ‘voluntary restraint arrangements’ (VRAs) or ‘orderly marketing arrangements’ (OMAs). In spite of extensive economic and policy criticism suggesting that, as an instrument of trade policy, export-restraint arrangements are usually a fourthor fifth-best choice4 (or worse), these arrangements have proliferated to such an extent that it appears that some countries prefer them to all other trade-restricting devices. Why this is so has been the subject of comment elsewhere. Clearly it relates, inter alia, to the national constitutional structures of governments which inhibit the use of other measures (such as tariffs or quantitative import restrictions, which may sometimes require parliamentary action or prerequisites specified in legislative delegations of power). It also relates to international rules such as the GATT’s Article XIX, its main ‘escape clause’ (providing for emergency protection against sudden surges of imports of a particular product), which requires an importrestricting country to ‘compensate’ exporting countries with new trade ‘concessions’. While economic and other policy considerations surrounding the use of exportrestraint arrangements have been amply explored, there is remarkably little analytical examination of the related legal question of whether such arrangements

The Little Dragons have Different Tales

Abstract: Colin I. Bradford and William H. Branson (eds). Trade and Structural Change in Pacific Asia Jimmy M. Wheeler and Perry L. Wood, Beyond Recrimination: Perspectives on US-Taiwan Trade Tensions Bruce Dickson and Harry Harding (eds), Economic Relations in the Asian-Pacific Region

A Service or Not a Service — Defining the Question by its Terms

Abstract: Jacques Nusbaumer, Sewices in the Global Market (Dordrecht, Boston and Lancaster: Kluwer Academic Publishers, 1987) 254 pp., DFI. 110.00, $45.00 and £29.95.