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The GATT as international discipline over trade restrictions : a public choice approach


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  • Finger, J. Michael


The General Agreement on Tariffs and Trade (GATT) was built on a mercantilist sense of economic welfare and a mercantilist sense that domestic producers had a higher claim than foreign producers to the domestic market. The trade negotiations process did not attack this claim. It gave producers in each country an opportunity to increase its value through mutually beneficial exchanges with producers in other countries. The process worked as long as institutions forced all producers in a country to reach a collective decision on trade policy. Another mutation of GATT institutions has begun with the development in the United States of"301", which provides a way for exporting producers to advance their interests without bearing the burden of suppressing or buying off import competing interests. Indeed,"301"attacks foreign restrictions not with the possibility of fewer U.S. restrictions, but with the threat of more. Trade remedy processes have been installed in many countries, so"301s"should not be far behind. The GATT system was devised to promote global security and free trade. In the present system, export interests will generate trade conflicts and import competing interestswill generate trade restrictions. Simply put, the institutions that shape the relevant public choices do not bring out the appropriate economic interests, and the resulting policy choices are not those that promote economic efficiency.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 402.

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Date of creation: 31 Mar 1990
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Handle: RePEc:wbk:wbrwps:402

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Keywords: Trade Policy; Rules of Origin; Environmental Economics&Policies; Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT;

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  1. Salvatore, Dominick, 1987. "Import penetration, exchange rates, and protectionism in the United States," Journal of Policy Modeling, Elsevier, vol. 9(1), pages 125-141.
  2. Takacs, Wendy E, 1985. "More on Protectionist Pressure and Aggregate Economic Conditions: A Reply [Pressures for Protectionism: An Empirical Analysis]," Economic Inquiry, Western Economic Association International, vol. 23(1), pages 183-84, January.
  3. Coughlin, Cletus C & Terza, Joseph V & Khalifah, Noor Aini, 1989. "The Determinants of Escape Clause Petitions," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 341-47, May.
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Cited by:
  1. Kozloff, Keith & Runge, C. Ford, 1991. "International Trade In The Food Sector And Environmental Quality, Health, And Safety: A Survey Of Policy Issues," Staff Papers 13325, University of Minnesota, Department of Applied Economics.
  2. Finger, Michael J. & Dhar, Sumana, 1992. "Do rules control power? GATT articles and arrangements in the Uruguay Round," Policy Research Working Paper Series 818, The World Bank.
  3. Wilfred J. Ethier, 2002. "Trade Policies Based on Political Externalities: An Exploration, Third Version," PIER Working Paper Archive 04-006, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 04 Feb 2004.
  4. David M. Gould & Graeme L. Woodbridge, 1993. "Retaliation, liberalization, and trade wars: the political economy of nonstrategic trade policy," Research Paper 9323, Federal Reserve Bank of Dallas.
  5. William Kaempfer & Ed Tower & Thomas D. Willett, 2002. "Trade Protectionism - Encyclopedia Entry," Claremont Colleges Working Papers 2002-19, Claremont Colleges.
  6. Ethier, Wilfred J., 2007. "The theory of trade policy and trade agreements: A critique," European Journal of Political Economy, Elsevier, vol. 23(3), pages 605-623, September.
  7. Gould, David M. & Woodbridge, Graeme L., 1998. "The political economy of retaliation, liberalization and trade wars," European Journal of Political Economy, Elsevier, vol. 14(1), pages 115-137, February.


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