Multilateral Trade Agreements Research Articles

Political Externalities, Nondiscrimination, and a Multilateral World

AbstractDuring the past half century, multilateral trade liberalization has reduced tariffs to historically low levels. The “Received Theory” of multilateral trade agreements, based solely on terms‐of‐trade externalities between national governments, offers an explanation that has become the conventional wisdom. But it is dramatically inconsistent with actual trade agreements. This paper offers an alternative explanation, based on intergovernmental political externalities, consistent with what we actually observe. With remarkably little necessary formal structure—in particular, no formal bargaining model—this framework (chosen to parallel actual experience) gives an immediate and transparent role to the basic characteristics of contemporary trade agreements: gradual liberalization, reciprocity, nondiscrimination, and multilateralism.

Health in an Age of Globalization

Disease has traveled with goods and people since the earliest times. Armed globalization spread disease, to the extent of eliminating entire populations. The geography of disease shaped patterns of colonization and industrialization throughout the now poor world. Many see related threats to public health from current globalization. Multilateral and bilateral trade agreements do not always adequately represent the interests of poor countries, the General Agreement on Trade in Services may restrict the freedom of signatories to shape their own health delivery systems, and it remains unclear whether current arrangements for intellectual property rights are in the interests of citizens of poor countries with HIV/AIDS. However, to the extent that globalization promotes economic growth, population health may benefit, and there has been substantial reductions in poverty and in international inequalities in life-expectancy over the last 50 years. Although there is a strong inverse relationship between the poverty and life-expectancy in levels, gains in life expectancy have been only weakly correlated with growth rates and, in the last decade, the HIV/AIDS epidemic has widened international inequalities in life expectancy. The rapid transmission of health knowledge and therapies from one rich country to another has led to a swift convergence of adult mortality rates among the rich of the world, particularly men. Globalization would do much for global health if transmission from rich to poor countries could be accelerated.

Trade policy under the GATT/WTO: empirical evidence of the equal treatment rule

Abstract. A fundamental difference between multilateral trade agreements like the GATT and WTO and a preferential agreement is the multilateral agreements’ inclusion of a most‐favoured‐nation principle. Though MFN requires that members implement policies that provide equal treatment to all GATT/WTO countries, how far do members actually follow the MFN principle when so required? We empirically investigate a sample of GATT/WTO trade disputes and the effect of successful dispute settlement negotiations on the disputed product trade of third country exporters to the defendant country. We document evidence of trade liberalization consistent with defendant countries successfully applying the equal treatment rule. JEL classification F13

A Convention on Cultural Diversity: From WTO to UNESCO

Article 19 of the Universal Declaration of Human Rights grants everybody the right ‘to freedom of opinion and expression … to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers’. Article 27 asserts that everybody has the right to participate freely in the cultural life of their community and enjoy the arts. In many countries, there is a growing perception that free trade agreements have debilitated these and other rights, and that consequently cultural identity is unsettled, and cultural diversity threatened. Concern about multinational conglomerates’ influence over cultural production and circulation, and a desire to ensure that countries can continue to make cultural policies and regulate their cultural markets without contravening commitments made as part of multilateral trade agreements, have contributed to efforts to develop a Convention on Cultural Diversity. UNESCO has now taken on this task. This article discusses the grounds for this Convention, and outlines some of the principles which will underpin it, as well as some of the problems it raises.

Trade Policies Based on Political Externalities: An Exploration, Third Version

During the past half century, multilateral trade liberalization has reduced tariffs to historically low levels. The Received Theory of multilateral trade agreements, based solely on terms-of-trade externalities between national governments, offers an explanation that has become the conventional wisdom among international trade theorists. But this explanation displays two puzzles that render it inconsistent with actual trade policy and actual trade agreements: the Terms-of-Trade Puzzle and the Anti-Trade-Bias Puzzle. This paper addresses inter-governmental political externalities in a model with terms-of-trade externalities. The model resolves the Terms-of-Trade Puzzle if and only if political externalities dominate terms-of-trade externalities. But it resolves the Anti-Trade-Bias Puzzle, and delivers results consistent with what we actually observe, only if terms-of-trade externalities play no role whatsoever.

Privatizing conditions of production: trade agreements as neoliberal environmental governance

Recent multilateral trade agreements are among the major manifestations of neoliberalism. They are also emerging as some of the most important sites of environmental governance in the 21st century. I argue here that these trade agreements, particularly the sweeping new protections they provide for investors, are redefining property rights and environmental governance in fundamental ways. I suggest that in addition to furthering the centuries-long process of the enclosure of nature under capitalism, the neoliberal agenda of NAFTA and similar trade agreements also involves something new: the privatization, or primitive accumulation, of conditions of production as an accumulation strategy. I explore these dynamics through examination of two cases, one in the United States and one in Mexico. I also explore the roles of social movements in these dynamics.

Transparency issues in NAFTA: concerns and directions for free trade in an open environment

For any bilateral or multilateral trade agreement to be effective, it is imperative that transparency and good governance form the mainstay for achieving parity and trust amongst the partners. This article highlights pressing issues facing the partners of the North American Free Trade Agreement (NAFTA), analyzes some of the current areas of conflict and suggests action to reduce tensions and promote harmony, goodwill and cooperation. The legal framework for transparency and governance needs to be seen as fair in addition to providing a mechanism for the airing of grievances and resolving conflicts. The requirements include: disclosure of relevant information, reasons for appropriate policy enactment and application and provision of investor protection safeguards. Of special import is the dire need to deal with issues of corruption at all levels. It is recommended that a conference be held to discuss issues of transparency and accountability as an initial endeavour in understanding the dynamics involved.

Socio Economic Conditions of Child Labourers in Pakistan: Evidence from the Labour Force Survey

Child labour has emerged as a serious, widespread and growing problem in many parts of the world. Asia has a large number of children employed as child labourers. Child Labour Survey 1996 reports that there are 3.3 million children working between the ages of 5 and 14 years in Pakistan. Developed countries have linked trade with child labour through the Harkin Bill and the Uruguay Round of Multilateral Trade Agreement (1994), which banned the market manufactured or mined goods produced in whole or in part by children under 15 years of age. Pakistan is also facing restrictions on some of its exports due to allegations of child labour. However, Pakistan has enacted the Employment of Children Act of 1991, which has banned employment of children below the age of 14 years.

Democratic Deficit, the Global Trade System and 11 September

This short paper examines the Howard government's engagement with the World Trade Organization through the prism of two events: the S11 anti‐globalisation protests and the 11 September terrorist attacks against the United States. Several policy dilemmas are highlighted including: concerns about the accountability and legitimacy of global political institutions (democratic deficit); the government's reluctance to expand public participation in trade policy‐making; and the preference for bilateral rather than multilateral trade agreements. Together these developments have undermined Australia's commitment to multilateralism and a “rules‐based” system for international trade, and have subjected Australia to the asymmetries of power that were traditionally mitigated by global political institutions.

Reasonable Value and the International Organization of Labor Rights

Critics of “globalization” have argued that “core” labor rights should be written into regional and multilateral trade agreements. “Free traders” oppose this; arguing if should be dealt with by the International Labor Organization, not in trade agreements. The critics find this less than satisfactory, as the ILO has no enforcement capability. We argue that the ILO is the appropriate body for dealing with labor rights, though not for the reasons that the “free traders” stand on. Rather, the ILO embodies the theoretical standpoint, theory of value, and analysis of labor markets found in the institutional economics of John R. Commons. While there are problems in applying Commons’ approach internationally, it is possible that incorporating ILO findings in national decision making may promote the ILO as an authoritative figure.

Environmental Politics in Canada: Managing the Commons into the 21st Century

material in the first three chapters to issues that appear on the front pages of our newspapers every day. Again, these are powerful tools that McKenzie uses well. The fifth chapter emphasizes the need for environmentalists to be proactive in their search for public and policy support by linking environmental degradation to human health and national security. The optimism implicit in this chapter is refreshing. The final chapter moves beyond a strictly Canadian context in its discussion of the relationship between multilateral environmental and trade organizations and agreements, and the transboundary problems associated with environmental degradation. It seems that a clear and articulate discussion of the contributions made by economists in general, but more specifically environmental economists, in the investigation of the relationship between trade and environmental degradation could have been helpful and enlightening. Unfortunately, we find no evidence that economists have had anything of value to add to the debate. The absence of this discussion is, in all likelihood, a result of economists' insistence on the use of notation and jargon, rather than a failure in McKenzie's policy analysis. In general, the integration of anecdote and example into the more abstract discussions was one of the strongest features of Environmental Policy in Canada, but the absence of complementary statistical analysis and substantive empirical evidence allows the reader to question and possibly dismiss some of McKenzie's arguments. The sparing use of images, tables, and graphs may make this book heavy work for some readers, particularly undergraduates who work under pressing time constraints. However, despite these quibbles, which probably reflect the reviewer's prejudices rather than weaknesses in the book, McKenzie has produced an interesting and insightful text that should attract a wide readership. IAN KEAY, School of Environmental Studies and Department of Economics, Queen's University CANADIAN PUBLIC POLICY ANALYSE DE POLITIQUES, VOL. XXIX, NO. 2 2003 This content downloaded from 157.55.39.4 on Thu, 08 Sep 2016 06:29:29 UTC All use subject to http://about.jstor.org/terms

Agricultural trade policies in the new millennium

Agricultural trade policies in the new millennium

Trade Agreements Based on Political Externalities, Second Version

During the past half century, multilateral trade liberalization has reduced tariffs to historically low levels. The Received Theory of multilateral trade agreements, based solely on terms-of-trade externalities between national governments, offers an explanation that has become the conventional wisdom among international trade theorists. But this explanation displays two puzzles that render it inconsistent with actual trade policy and actual trade agreements. This paper introduces intergovernmental political externalities into a model with terms-of-trade externalities. It delivers results consistent with what we actually observe, and thus resolves the puzzles, if and only if political externalities dominate terms-of-trade externalities.

The General Agreement on Trade in Services (GATS) and its impact on Sustainable Tourism

ABSTRACT After years of negotiation between members of the World Trade Organisation, the General Agreement on Trade in Services (GATS) is due to come in to force at the end of 2002. GATS is the first multilateral trade agreement covering the provision of services. The agreement, covering a range of sectors promises to have a significant effect on tourism service provision and perhaps pose a significant challenge to the efforts to develop sustainable forms of tourism. GATS is already the subject of considerable controversy and is heavily criticised by human rights, environmental and developing world activist groups many of whom see it as nothing more than a front for corporate domination of global markets. This paper aims to outline the GATS, examine its legal principles and explain the enthusiasm of its supporters and the concerns of the critics. Furthermore, it considers the potential impact of GATS on issues such as local community participation and tourism governance issues.

Political Externalities, Nondiscrimination, and a Multilateral World (Second Version)

During the past half century tariffs have reached historically low levels through gradual, nondiscriminatory, and multilateral liberalization featuring reciprocal concessions. Yet economists have not obtained convincing explanations of why liberalization possesses these characteristics or of what their implications are. There is an extensive theoretical literature on multilateral trade agreements, based on the idea of terms-of-trade externalities between national governments, but this literature is inconsistent with actual agreements. This paper presents an alternative, rudimentary, multi-country model with high initial tariff barriers; a caricature of the world of half a century ago; based instead on political externalities between governments. With remarkably little necessary formal structure in particular, no formal bargaining model the framework gives an immediate and transparent role to gradual liberalization, reciprocity, nondiscrimination, and multilateral negotiation that is consistent with and closely parallels actual experience.

Do We Really Know That the WTO Increases Trade?

This paper estimates the effect on international trade of multilateral trade agreements—the World Trade Organization (WTO), its predecessor the General Agreement on Tariffs and Trade (GATT), and the Generalized System of Preferences (GSP) extended from rich countries to developing countries. I use a standard “gravity” model of bilateral merchandise trade and a large panel data set covering over 50 years and 175 countries. An extensive search reveals little evidence that countries joining or belonging to the GATT/WTO have different trade patterns from outsiders, though the GSP seems to have a strong effect.

MEASURING THE COST OF ENVIRONMENTAL AND LABOR PROTESTS TO GLOBALIZATION: An Event Study of the Failed 1999 Seattle WTO Talks

The World Trade Organization's ministers failed to set an agenda for the Millennial Round of trade negotiations during their 1999 Seattle meeting, the first time such a meeting failed since multilateral trade agreements first began in 1947. Additionally, the Seattle meeting encountered unprecedented public protests against the WTO and trade liberalization, and globalization more broadly. How serious were the protests and the failure to commence a new trade round in Seattle? Utilizing an event study, we find that investors bid down the stock price of a portfolio of Fortune 500 firms almost two percent. Moreover, the cost to firms in industries perceived as environmentally or labor-abusive (the specific protest targets) was higher. A sub-sample of firms in "abusive" industries experienced negative returns of 2.7 percent, which was almost twice the decline for the remaining firms in "non-abusive" industries. Regression analysis shows that returns were driven primarily by a firm's inclusion in an abusive industry, rather than by its level of internationalization. Additionally, when the component halves of the abusive sample are analyzed separately, only firms in environmentally abusive industries experienced a statistically significant negative stock decline.

The Cartagena Protocol on Biosafety: Taking the Steps from Negotiation to Implementation

In a relatively new era of attention to the relationships and potential conflicts between multilateral environmental and trade agreements, the negotiation of the Cartagena Protocol on Biosafety (the Protocol) became a flashpoint for an evolving trade–environment debate, which has proliferated in both policy and academic circles. Despite early concerns regarding legal consistency and jurisdictional issues between the Protocol and the World Trade Organization (WTO), the last 2 years have allowed significant time for further discussion and subsequent events to temper views regarding the interplay of these two instruments. The events leading up to the final meeting to negotiate the Protocol, including the failed biosafety working group meeting in Cartagena (January 1999) and the failed WTO Ministerial meeting in Seattle (November/December 1999), generated significant concern over the interplay of trade and the environment. This was particularly the case regarding the specific issues of biosafety and biotechnology, as well as the intersection of discussions on environment, human health, food safety and agriculture. While many of these fears and their relationships to country negotiating positions stemmed partly from rhetoric, partly from supposition and partly from domestic interests, the subsequent passage of time has allowed reflection on which items are of greatest true importance. Additionally, the impact of external factors, including other relevant negotiating processes and developments at the national and regional levels, is becoming increasingly crucial in setting the context for the Protocol’s implementation.

Gats and Tourism

The economic emphasis is upon globalization, and fundamental to this is the degree of trade liberalization that is one of the main objectives of the World Trade Organization. All forms of economic activity today are fundamentally dependent on international trade. Initially emphasis was focused upon international trade in manufactured goods but, more recently, this emphasis has shifted along with the significant growth in trade of services. International cooperation in trading services is not new, but the General Agreement on Trade in Services (GATS) represents the first multilateral trade agreement effort to establish rules governing services trade, including travel and tourism, and to provide a framework for multilateral negotiations on improved market access for foreign services and service suppliers. This represents a significant step forward in international economic cooperation. It reflects a growing realization of the economic importance of trade in services, as well as the need for closer cooperation among nations in a world with growing interdependence

Globalisation and Its Implications for Agriculture, Food Security, and Poverty in Pakistan

The world trade liberalisation has been the major concern to almost all the international communities since very long due to the extensive trade restrictions imposed by the developed and industrial countries. These restrictions caused to create a very tough protectionist economic environment for all the countries [SESRTCIC (1995) and Chaudhary (2001)]. Pakistan is one of the founder members of the General Agreement on Tariffs and Trade (GATT) since 1948 and a signatory of Uruguay Round of Multilateral Trade Agreement (MTA) with Word Trade Organisation (WTO). The Agreement made significant progress in three major areas i.e. market liberalisation which could add approximately one percent of world real GDP (US$212-274 billion) and 10 percent to world trade upon full implementation of the Agreement, strengthening of rule and institutional structure, particularly the creation of WTO, which could decide on dispute and impairment of trade rules and principles, and integration of new areas into the multilateral trading system such as general agreements on trade in services (GATS) and trade-related intellectual property rights (TRIPs), trade-related investment measures (TRIMs) and the traditionally sensitive and contentious sectors (agriculture, and textile and clothing) [Abidin (1994); GATT (1994) and IMF (1994)]. The classical economists explained the welfare benefits of globalisation (by the specialisation and widening of markets through trade). Trade can bring settlement by allowing countries to take benefit of their comparative advantage, harvest the profit of scale economies and ensure competition, greater variety and potentially, more stable markets and prices. The free movement of capital directs resources towards their more productive use.