© 1992 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
Issues and developments in international trade policy / by a staff team led by Margaret Kelly and Anne Kenny McGuirk: Peter Winglee … [et al.].
p. cm. — (World economic and financial surveys)
Includes bibliographical references.
ISBN 9781451939545
1. Commercial policy.2. International trade. I. Kelly. Margaret. II. McGuirk. Anne Kenney. III. Winglee, Peter IV. Series
HF1411.184 1992 92-28466
382.3—dc20 CIP
ISSN 0258-7440
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Contents
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Preface
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I. Overview
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Major Developments in Trade and Trade-Related Policies
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Background to Developments
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Industrial Countries
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Developing Countries
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Regional Developments and Initiatives
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Developments in the Multilateral Trade System
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II. Overall Trends
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Output, Trade, and Foreign Investment
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Trade Trends in Developing Countries
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III. Industrial Countries’ Trade and Trade-Related Policies
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Recent Trends in Trade Policies
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Tariffs
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Nontariff Measures
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Antidumping and Countervailing Duties
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Trends in Government Support
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Industrial Subsidies
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Multilateral Efforts to Curb Subsidies
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Trade Policy Developments in Individual Countries
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United States
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Japan
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European Community
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Canada
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Other Industrial Countries
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IV. Trade Liberalization in Eastern European Countries
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Historical Setting: Trade Policy in the Context of Central Planning
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Recent Reforms and Design Issues
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Recent Reforms
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Issues in the Design of Trade Reform
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Integration into the Multilateral Trading System
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Access to Industrial Country Markets
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Full Integration into GATT
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V. Trade Policies of Developing Countries
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Trade Policies Prior to the Mid-1980s
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Trade Policies Since the Mid-1980s
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Extent of Reforms
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Issues in the Design and Implementation of Trade Reforms
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Trade Liberalization Versus Export Promotion and Selective Intervention
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VI. Agricultural Trade Policies: Recent Developments and Issues in Reform
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Recent Policy Developments
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General Setting
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United States
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European Community
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Japan
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EFTA Countries
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Canada, Australia, and New Zealand
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Eastern Europe
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Developing Countries
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The Reform of Agriculture
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Rationale for Agricultural Support
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Studies of the Gains from Liberalization
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Approaches to the Reform of Support Policies
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VII. Issues for the 1990s
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Integration of Developing and Eastern European Countries into the Multilateral Trade System
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Regional Arrangements and the Multilateral Trade System
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Globalization of Investment and Production
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Interrelation Between Trade and Competition Policies
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Issues Related to Trade and Investment Policies
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Issues Related to Innovation and “Strategic” Trade Policies
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Trade and the Environment
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Boxes
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1. Trade-Related Work Program of the OECD
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2. Methodology Used in Trade Review
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Appendices
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I. The GATT System
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The Contracting Parties
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The GATT Council of Representatives
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GATT Surveillance
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Instruments of Protection
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The Committee on Trade and Development
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II. The Interface Between Trade and Competition Policies
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Definitions, Aims, Sources of Conflict, and Implications
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Past Efforts to Deal with the Interaction Between Trade and Competition Policies
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Examples of Conflicts Between Trade and Competition Policies
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Proposals to Reduce Policy Inconsistencies
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III. Measures and Costs of Protection
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Measuring Nontariff Barriers
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Measuring the Effects of Nontariff Barriers
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Statistical Appendix
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Bibliography
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Tables
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Section
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II. 1. Developments in Regional Trade Flows, 1980–89
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2. Merchandise Trade
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3. Developing Countries: Export Volumes, 1973–90
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III. 4. Import Coverage Ratios of Selected Nontariff Measures, by Type of Measure, Applied by Selected Developed Market-Economy Countries
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5. Summary of Export Restraint Arrangements by Product and Exporting Region, End of March 1989
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IV. 6. Trade and Payments Systems of Eastern European Countries as of June 1991
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7. Bilateral Trade Arrangements Between Eastern European Countries and the Former U.S.S.R.
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8. Market-Opening Measures Taken by Industrial Countries for Eastern European Exports
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9. Industrial Countries’ Nontariff Barriers to Exports by Eastern Europe
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10. Current Situation of Eastern European Countries in GATT
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V. 11. Developing Country Trade Regimes Before Liberalization
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12. Trade Reform Programs in Developing Countries
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13. Current Structure of Developing Country Trade Regimes
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14. Trade Liberalization, Stabilization, or Both
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VI. 15. Total Transfers Associated with Agricultural Policies
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16. Net Producer Subsidy Equivalents
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VII. 17. Old Arguments in New Cloth?
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Appendix
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II. 18. Indicative Checklist for the Assessment of Trade Policy Measures
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19. Dumping and Antidumping
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20. Examples of Problems with Antidumping Laws and Procedures
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21. Excerpts from OECD Communiqué, June 1991
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III. 22. Estimated NTB Tariff Equivalents in Japan and the United States, 1973
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23. A Comparison of NTB Tariff Equivalents
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24. A Comparison of the Stoeckel Model and the Deardorff and Stern Model
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Statistical Appendix
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A1. Major Industrial Countries: Real GNP, Domestic Demand, and Trade Volumes, 1973–90
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A2. Shares in World Exports of Manufactures, 1963–89
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A3. Developing Countries’ Exports by Product, 1980–88
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A4. Shares of Exports of Manufactures by Area and Sector, 1973–88
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A5. The Level of Post-Tokyo MFN, Applied, and GSP Tariffs in Selected Developed Countries
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A6. Importance of GATT Tariff Bindings in Industrial Countries
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A7. Import Coverage Ratios of Selected Nontariff Measures, by Country Groupings, Applied by Selected Developed Market-Economy Countries
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A8. Trade Coverage Rates of Selected NTMs Applied by Developed Countries, 1981–90
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A9. Export Restraint Arrangements, 1987–90
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A10. Textiles and Clothing: Nontariff Barriers to Trade
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A11. Summary of Antidumping Actions Taken by Selected Countries, 1981–90
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A12. Summary of Countervailing Actions Taken by Selected Countries, 1981–90
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A13. United States: Outstanding Unfair Trade Practice Cases Abroad and Safeguard Petitions, December 31, 1990
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A14. Industrial Country Subsidies
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A15. Subsidies by Sector (National Accounts Definition)
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A16. Government Support in the EC by Sector
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A17. Support to Manufacturing in the EC and EFTA Countries by Instrument
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A18. Government-Financed Expenditure on Research and Development in the Enterprise Sector, 1970–88
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A19. Determinations Under the 1988 Amendments to Section 301 of the 1974 Trade Act of the United States
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A20. Commodity Composition of Exports, by Selected Eastern European Countries
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A21. Commodity Composition of Imports, by Selected Eastern European Countries
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A22. Total Transfers Associated with Agricultural Policies
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A23. Agriculture in National Economies, 1988
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A24. Factors Contributing to the Changes in Total Net Producer Subsidy Equivalents
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A25. Trade in Agricultural Products of Selected Industrial Countries
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A26. Cereal Exports, 1978/79–1990/91
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A27. Cereal Imports, 1978/79–1990/91
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A28. Main Agricultural Producer Support Policies for Selected Countries and Major Commodities, 1991
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A29. United States: Agricultural Support, 1980–92
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A30. United States: Support Programs for the Main Agricultural Commodities
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A31. United States: Budgetary Spending on Agriculture, by Commodity, 1985/86–1991/92
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A32. United States: Quantitative Restrictions on Agricultural Imports
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A33. European Community: Average Degree of Self-Supply in Selected Agricultural Products, 1956–89
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A34. European Community: European Agricultural Guarantee and Guidance Fund—Guarantee Section, Expenditures by Sector, 1976–90
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A35. European Community: Target Prices for Selected Commodities, 1980/81–1991/92
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A36. Japan: Self-Sufficiency Rates of Major Agricultural Products
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A37. Japan: Administrative Prices of Major Agricultural Products
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A38. Japan: Expenditure on Agriculture and Rural Development, 1975–91
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A39. Japan: Nominal Protection Coefficients
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A40. Direct, Indirect, and Total Nominal Protection Rates
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A41. Estimates of the Impact of Liberalization of Agricultural Policies by Industrial Countries
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A42. Effects on Global Welfare of Liberalization by Industrial Countries
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A43. GATT Membership
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A44. Multilateral Trade Negotiation (MTN) Agreements—Legal Status at December 7, 1990
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A45. GATT Panels Established Since 1985
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A46. Balance of Payments Consultations Since Introduction of 1979 Declaration
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A47. Recourse to Article XIX of the General Agreement on Tariffs and Trade, 1978–91
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Chart
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1. Real Trade and GDP Growth, 1960–90
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The following symbols have been used throughout this paper:
… to indicate that data are not available:
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
– between years or months (e.g., 1990–91 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 1990/91) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The term “country” used in this study does not in all cases refer to a territorial entity that is a state as understood by international law and practice. The term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.
Preface
This study was prepared in the Trade and Payments Division of the Exchange and Trade Relations Department of the International Monetary Fund. Its authors are Margaret Kelly, Division Chief; Anne McGuirk, Deputy Division Chief; Peter Winglee, Senior Economist; Clemens Boonekamp, Senior Economist (Geneva Office); Yoon Je Cho and Bernhard Fritz-Krockow, Economists; and Peter Uimonen, Research Assistant.
To obtain information and collect views for this paper, staff teams held discussions with trade and economics officials in Bonn, Brussels (the Commission of the European Communities), Canberra, London, Ottawa, Paris, Seoul, Tokyo, Washington, and Wellington. In addition, a staff team visited Geneva and Paris for discussions with GATT and OECD officials. Staff members of the Western Hemisphere Department participated in the discussions held in Ottawa and Washington. Staff members of the European Department participated in the discussions in Brussels, Canberra, Paris, and Wellington, and staff members of the Asian Department participated in the discussions in Seoul and Tokyo. While in Europe, the staff team was assisted by the Fund Office in Europe and the Fund Office in Geneva.
The study reviews major issues and developments in the trade area and outlines the challenges governments face as they seek to liberalize trade in the Uruguay Round of trade negotiations and address “new” trade issues. The coverage of the study is through October 1991 and, as a result, does not reflect subsequent developments, most notably in Eastern Europe and the former Soviet Union. It follows the pattern of the Fund staff surveys prepared in 1978, 1981, 1982, 1985, and 1988.1
The authors are indebted to a number of colleagues, both in the Fund and in other national and international agencies, for their willingness to exchange views and provide information. The authors are grateful to Joslin Landell-Mills for her assistance in preparing the study from a longer manuscript; to the editor Juanita Roushdy of the External Relations Department; to Christine Hörbinger for research assistance, and to Marcela Toso and Elizabeth Mack for keyboarding. The authors alone are responsible for the study; any opinions expressed are theirs and do not necessarily reflect the views of the Fund.