The Political Economy of the World Trading System The WTO and Beyond

by Hoekman, Bernard M.; Kostecki, Michel M.

• ISBN13: 9780198294313
• ISBN10: 019829431X
• Edition: 2nd
• Format: Paperback
• Copyright: 2001-09-27
• Publisher: Oxford University Press

Summary

The creation of the World Trade Organization (WTO) in 1995 ushered in a new era in world trading arrangements. Building on the General Agreement on Trades and Tariffs (GATT), the intergovernmental treaty that for 50 years had regulated international trade relations, the WTO is a globalorganization of equal standing to the International Monetary Fund and the World Bank, and will set the agenda for international trade for decades to come. The authors of this volume were heavily involved in the Uruguay Round of GATT negotiations that laid the foundations for the creation of the WTO,and were ideally placed to see how the politics of negotiation affects the economics of trade. The Political Economy of the World Trading System is the first comprehensive and accessible introduction to the institutional mechanics, economics, and politics of the global trading networks. It goes beyond description of the rules of the WTO to analyse the political and economic forces thatsculpted them, the incentives for countries to abide by them, and the likely future direction of the organization. The authors show how governments are not necessarily the social welfare-maximizing entities often found in textbooks, but instead develop policy subject to the pressures of a variety ofinterest groups. Although economic theory suggests that countries should pursue liberal trade policies and exchange goods and services on the basis of their comparative advantage, in practice most nations actively intervene in international trade. The political economy approach taken in this volumeexplains how the WTO functions, why GATT has been very successful in reducing tariffs, and why it has proven much more difficult to expand the reach of multilateral disciplines to domestic policies impacting on trade. This book will increase the reader's understanding of international economics, business, and international relations by supplying in-depth insider knowledge of how trade negotiations take place, how this decision-making affects trade policy, and how the multilateral arrangements that shape worldtrade are created. This information is crucial to understand why WTO rules are phrased as they are, and to understand the processes by which business organizations, industrial associations, and political lobbies influence the multilateral trading system. In this expanded and thoroughly revisededition, the authors have taken account of the recent developments in international trade relations, included an extra chapter on the historical importance of international trading arrangements, and updated all the references and guides to further reading.

Table of Contents

List of Figures	xv
List of Tables	xvi
List of Boxes	xvii
List of Abbreviations	xix
Introduction	1	(8)
PART I: THE GLOBAL TRADING SYSTEM
The Trading System in Perspective	9	(40)
Trade and Global Integration	9	(10)
Trade and Trade Agreements in History	19	(6)
Functions of the Multilateral Trading System	25	(12)
From GATT to WTO	37	(4)
The Challenge of Global Cooperation	41	(3)
Further Reading	44	(5)
PART II: THE INSTITUTION
The World Trade Organization	49	(25)
Scope, Functions and Structure of the WTO	50	(6)
Decision-Making	56	(5)
Transparency: Notification and Surveillance	61	(4)
Accession	65	(3)
The WTO and other International Organizations	68	(1)
Nongovernmental Actors and the WTO	69	(3)
Conclusion	72	(1)
Further Reading	72	(2)
Dispute Settlement and Enforcement of Rules	74	(26)
The Wto Dispute Settlement Procedures	74	(4)
Operation of the System	78	(9)
Systemic Issues	87	(5)
The Domestic Dimensions of Enforcement	92	(4)
Conclusion	96	(2)
Further Reading	98	(2)
Negotiating Forum	100	(45)
Overview of Negotiating Rounds	100	(8)
Multilateral Trade Liberalization	108	(12)
Interest Groups and Lobbying Activity	120	(2)
Reciprocity and the Mechanics of Negotiations	122	(13)
A Typology of Key Aspects of Trade Negotiations	135	(6)
Further Reading	141	(4)
PART III: THE MULTILATERAL TRADE AGREEMENTS
Trade in Goods	145	(63)
Tariffs, Para-Tariffs and Indirect Taxes	147	(7)
Quantitative Restrictions and Import Licensing	154	(2)
Customs Clearance-Related Provisions	156	(13)
Subsidies	169	(10)
State Trading Enterprises	179	(6)
Technical Regulations and Product Standards	185	(10)
Sanitary and Phytosanitary Measures	195	(6)
Trade-Related Investment Measures	201	(4)
Conclusion	205	(1)
Further Reading	206	(2)
Sector-Specific Multilateral Trade Agreements	208	(29)
Agriculture	208	(18)
Textiles and Clothing	226	(5)
The Information Technology Agreement	231	(2)
Conclusion	233	(2)
Further Reading	235	(2)
Trade in Services	237	(37)
Conceptual and Empirical Issues	238	(4)
Barriers and Potential Gains from Reform	242	(6)
The Uruguay Round Negotiations	248	(2)
The GATS	250	(8)
Sector-Specific Negotiations and Agreements	258	(5)
Electronic Commerce	263	(3)
The Challenge of Expanding the GATS	266	(5)
Conclusion	271	(1)
Further Reading	272	(2)
Protection of Intellectual Property	274	(29)
Intellectual Property and International Trade	274	(6)
International Conventions and GATT History	280	(3)
The Uruguay Round Negotiations	283	(2)
WTO Rules on Intellectual Property Rights	285	(5)
Implementation Concerns and Challenges	290	(7)
Conclusion	297	(2)
Further Reading	299	(4)
PART IV: HOLES AND LOOPHOLES
Safeguards and Exceptions	303	(43)
Renegotiation of Concessions	308	(1)
Waivers	309	(2)
Emergency Protection and VERS	311	(4)
Antidumping Actions	315	(15)
Measures to Countervail Subsidized Imports	330	(5)
Trade Restrictions for Balance of Payments Purposes	335	(3)
Infant Industry Protection	338	(1)
General Exceptions	339	(2)
Conclusion	341	(2)
Further Reading	343	(3)
Regional Integration	346	(23)
Motivations for Regional Economic Integration	347	(5)
GATT Article XXIV: Preferential Trade Agreements	352	(3)
GATS Article V: Economic Integration	355	(1)
Trading Blocs and the Trading System	356	(9)
Conclusion	365	(2)
Further Reading	367	(2)
Plurilateral Agreements	369	(16)
Government Procurement	369	(11)
The Civil Aircraft Agreement	380	(1)
Conclusion	381	(1)
Further Reading	381	(4)
PART V: CHALLENGES FOR THE TRADING SYSTEM
Integrating Developing Countries and Economies in Transition	385	(28)
Special and Differential Treatment	385	(6)
Changing Attitudes Towards the Trading System	391	(1)
Developing Country Participation in the WTO	391	(5)
Implementation of Multilateral Agreements	396	(7)
Expanding Membership	403	(5)
Conclusion	408	(2)
Further Reading	410	(3)
Towards Deeper Integration? The `Trade and' Agenda	413	(48)
Contestability of Markets as a Criterion	414	(4)
Foreign Direct Investment Policies	418	(7)
Competition Law	425	(9)
Trade Facilitation	434	(7)
Environmental Policies	441	(7)
Social Policies and Labor Standards	448	(5)
Domestic Regulation	453	(2)
Conclusion	455	(3)
Further Reading	458	(3)
Legitimacy, Coherence and Governance	461	(16)
Industry and Trade Policy Formation	462	(4)
NGOs and Civil Society	466	(5)
Governance of the Wto	471	(3)
Coherence of National Policies	474	(3)
Conclusion	477	(1)
Further Reading	478
Whither the Trading System?	477	(28)
Annexes
Annex 1: GATT/WTO Membership, 2000	485	(2)
Annex 2: Economic Effects of Trade Policy---Basic Concepts	487	(18)
References	505	(36)
Index	541