Tariff concessions in the Kennedy Round and the structure of protection in West Germany: An econometric assessment

It is well documented that the structure of tariffs in industrialized countries affords the greatest protection to relatively (unskilled) labor-intensive branches of industry (Constantopoulos3 1974 and references therein). Since we know from the Stolper-Samuelson theorem that this implies an improvement in the relative reward for services of labor, in particular unskilled labo, the political motive for such a tariff policy is obvious. In recent years industrialized countries have loudly proclaimed their dedication to the principles of free-trade and their intent to counterbalance the disadvantageous trade position of the less developed countries. While progress on the latter objective has been modest (Murry, 1973), great gains have been achieved in lowering tariff barriers. The most significant advances in this regard were effected in the GATT Kennedy Round (1963-67), which produced an average 35 percent reduction in tariff levels of non-agricultural products by far and away exceeding any reductions negotiated in previous GATT rounds. An interesting question in light of industrialized countries practised, as well as proclaimed dedication to trade liberalization is whether their tariff policy continues to be designed with labor's short-run interests in mind.