further 122 draft directives had been circulated for discussion. Since it is expected that national restrictions on imports from third countries will no longer be enforceable by 1992, a major question remains as to the ramifications of the EC-wide measures for third-country trade. The same question, of course, also applies a priori to all such preferential trade agreements. Since 1975 intra-ECimports have increased at an annual rate of 10.9 percent, whereas non-ECimports have risen at a much slower 7.5 percent. 32
Internally, the EC pressed ahead with its single
This study emerges from the compilation of the International Monetary Fund’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), which has been published since 1950. These country-specific reports, including the 1989 edition, which serves as the background document for the present study, are prepared in accordance with the provisions of Article XIV, Section 3, of the Fund’s Articles of Agreement. They inform the Fund membership and public of the current status of exchange rate arrangements and the restrictive systems for trade and payments in Fund member countries. Using basic information compiled by the Fund staff, this study identifies trends and reviews major developments underlying topical issues in the system of financial and trade linkages between countries. The emphasis is on recent major policy actions of trading and financial nations that have systemic consequences. By its nature, the study stresses institutional rather than quantitative evidence in support of its findings.
As noted in Section I, the Fund’s Articles of Agreement state broad aims for members’ exchange rate policies and arrangements. However, each member selects its own regime, while the Fund is enjoined to “exercise firm surveillance” over these policies (Article IV). The Fund, in a document entitled “Surveillance Over Exchange Rate Policies” issued in 1977,6 gives members further guidance in setting exchange rate policies; broadly, members should avoid manipulating exchange rates or the international monetary system, they should intervene in the market if necessary to counter disorderly conditions, and when they do so, they should take into account the interests of other members.
This chapter surveys major developments in Fund members’ restrictive practices affecting international trade and financial transactions. These practices take the form of either quantitative restrictions or price-related measures that involve implicit or explicit taxes and subsidies affecting international transactions. Most of the practices are described in detail in the country-specific reports that comprise the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER).
This paper summarizes major measures taken in the international exchange and trade systems in 1988 and developments in exchange arrangements and the evolution of exchange rates. The exchange arrangements adopted by members since 1973 cover a broad spectrum of degrees of flexibility, from single-currency pegs to a freely floating system. Most countries have adopted arrangements that fall clearly into one or another of the major categories of the present classification system adopted by the IMF in 1982, and countries with dual markets usually have one market that is clearly more important than the other, which allows accurate classification by major market. Changes in IMF members' arrangements for their currencies during this decade have shown a distinct tendency to move toward more flexible arrangements and away from single-currency pegs, continuing a trend that began in the mid-1970s. A qualitative sense of the significance of the trend toward more flexible arrangements can be conveyed by the degree that world trade is affected by countries adopting different arrangements.
1 can be summarized as follows. First, the role of Arab countries in extra-EC non-oil imports is fairly modest. In 1985, Arab countries accounted for 2.1 percent of ECimports followed by a slight upswing in 1988 and 1991 (2.6 percent). Hence, in the implementation period, which was also a period of rapid EC economic growth (partly induced by EC-1992 anticipatory cross-border mergers and acquisitions), Arab countries failed to capture a larger share of ECimports. Such stagnation coincides with the observation that trade shares were overproportionately higher and
relations, this objective does not seem to have been achieved. Although ACP exports to the Community, excluding crude and refined petroleum products, have increased in value by 51 percent between 1976 and 1983, their share of total ECimports from outside the Community during this period fell from 6.3 percent to 4.5 percent, while their share of imports into the EC from all developing countries remained stable at around 19 percent. During the same period the trade balance in the Community’s favor rose from ECU 3.5 billion to ECU 4.4 billion. However, it is not possible to
Even a casual look at agricultural policies around the world reveals many surprising anomalies. In the United States, for example, the government pays farmers not to grow cereals; in the European Community, farmers are paid to grow more. In Japan, rice farmers receive three times the world price for their crop. In 1985, farmers in the EC received 180 a pound for sugar that was then sold on the world markets for 50 a pound; at the same time, the ECimported sugar at 180 a pound. Canadian farmers pay up to eight times the price of a cow for
percent of EC exports)
European Community (10) 1
To third countries
(In percent of ECimports)
European Community (10) 1
supply of fish within the EC, fishing rights are bought from third countries or negotiated in exchange for access to markets. To protect the fishing and fish processing industry, tariff barriers and quotas are imposed on fish imports. While fishing within EC waters has been limited to conserve the fish stocks and because of pollution, fish catches outside EC waters have also decreased. Falling catches, however, have meant that the EC’s fish processing industry has had to import more fish from outside sources.
In 1988, 5 percent of ECimports of unprocessed fish came