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The Evolution of the Trade Regime

The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO

John H. Barton
Judith L. Goldstein
Timothy E. Josling
Richard H. Steinberg
Copyright Date: 2006
Pages: 256
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  • Book Info
    The Evolution of the Trade Regime
    Book Description:

    The Evolution of the Trade Regimeoffers a comprehensive political-economic history of the development of the world's multilateral trade institutions, the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). While other books confine themselves to describing contemporary GATT/WTO legal rules or analyzing their economic logic, this is the first to explain the logic and development behind these rules.

    The book begins by examining the institutions' rules, principles, practices, and norms from their genesis in the early postwar period to the present. It evaluates the extent to which changes in these institutional attributes have helped maintain or rebuild domestic constituencies for open markets.

    The book considers these questions by looking at the political, legal, and economic foundations of the trade regime from many angles. The authors conclude that throughout most of GATT/WTO history, power politics fundamentally shaped the creation and evolution of the GATT/WTO system. Yet in recent years, many aspects of the trade regime have failed to keep pace with shifts in underlying material interests and ideas, and the challenges presented by expanding membership and preferential trade agreements.

    eISBN: 978-1-4008-3789-2
    Subjects: Political Science, Law

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
  3. List of Illustrations, Box, and Tables
    (pp. ix-x)
  4. Preface
    (pp. xi-xiv)
  5. One Political Analysis of the Trade Regime
    (pp. 1-26)

    In 1995, with high hopes and great fanfare, the World Trade Organization (WTO) was established. Its champions extolled its many virtues. It was to be a global organization, not just a club of Western trading nations. It would be a legitimate multilateral institution, with formal legal status as an international organization and formal diplomatic status for its secretariat. Its detailed rules and automatic and binding dispute settlement mechanism would make it one of the most legalized international institutions in the world. Its rules were touted as covering “commerce” construed more broadly than ever—not just trade in goods, but also...

  6. Two Creating Constituencies and Rules for Open Markets
    (pp. 27-60)

    When the United States invited fifteen nations to join in an initial round of trade talks in 1946, participants did not expect the meeting to yield the rules for commercial policy that would regulate trade for the subsequent century. Assuming that the regime’s regulations were to be renegotiable, participants paid scant attention to the structure of the new organization. The GATT structure did survive, however, and with minimal changes over the following decades, influencing the trajectory of the trade regime in two fundamental ways.

    First, the relationship between the principals (states) and the agent (the secretariat) remained underdefined. The resulting...

  7. Three The Politics of the GATT/WTO Legal System: Legislative and Judicial Processes
    (pp. 61-90)

    The preceding chapter reviewed the development of the GATT/WTO system. This chapter describes and analyzes legislative and judicial rules and processes at the WTO, and considers critiques of those processes.¹ Part 3.1 examines the WTO’slegislativerules and processes, showing how developed countries (principally the EC and the United States) have dominated WTO legislative decision-making. Part 3.2 describes and analyzes the WTO’sjudicialrules, norms, and processes in light of the legislative process. Trade negotiators from powerful countries see the primary function of the WTO dispute settlement system as helping enforce the terms of agreements reached through the WTO legislative...

  8. Four Expanding Trade Rules and Conventions: Designing New Agreements at the Border
    (pp. 91-124)

    Though world trade expanded rapidly in the years after World War II, the scope of the GATT trade regime remained modest. The Havana Charter had imagined an organization whose mandate addressed a diverse set of problems, ranging from wage levels to business practices: the GATT had a much more limited agenda. Both the articles of the GATT, which changed very little, and the successive rounds of negotiations centered on liberalization of trade barriers “at the border.” In the early years, trade rounds focused on the conversion of quantitative trade barriers to tariffs, and the binding and reduction of those tariffs...

  9. Five Extending Trade Rules to Domestic Regulations: Developing “Behind the Border” Instruments
    (pp. 125-152)

    The narrow focus and limitations of the rules of the multilateral trade system embodied in the GATT were becoming clear by the mid-1970s, as the first effects of globalization began to be felt. Freer trade, coupled with open capital markets, encouraged businesses to rethink their production structures and strategies. For many, the location of production became increasingly divorced from the location of the market. Foreign direct investment boomed, facilitated by the emergence of a capital market without borders. Outsourcing became a way to take advantage of the diversity of production costs and conditions. But firms that had expanded beyond the...

  10. Six Expansion of GATT/WTO Membership and the Proliferation of Regional Groups
    (pp. 153-181)

    The trade system reflects its “membership,” the national actors that participate in decisions and are subject to its rules. Changes in the system can be brought about by shifts in the composition and behavior of the membership. This chapter focuses on two such shifts: the increased number of countries participating actively in the institutions of the multilateral trade system, and the expansion in the number of regional trade agreements that appear to provide some “insurance” for their membership but may undermine the multilateral system.

    Among the most significant changes in the GATT/WTO system has been its expansion in membership. The...

  11. Seven Accommodating Nonstate Actors: Representation of Interests, Ideas, and Information in a State-Centric System
    (pp. 182-203)

    Trade policy, in the view of many groups, has become too important to be left to governments. So while governments discuss and negotiate on matters such as the lack of power, unfair processes, and unfavorable outcomes of the GATT/WTO for developing countries, newnonstate actors—namely, environmentalists, organized labor, and antiglobalization activists—voice similar complaints about lack of influence. Some developing countries emphasize that the processes are fundamentally “undemocratic.” And so these NGOs and developing countries often support each other in their complaints about the WTO.

    These new nonstate actors are not, of course, the only nongovernmental organizations in the...

  12. Eight Conclusions
    (pp. 204-218)

    The vast increase in the cross-national movement of goods and services in the years following World War II was both a cause and a manifestation of the globalization of the world economy. This increase in trade dwarfs that which occurred a century earlier and represents a new era in which production and commerce became intricately intertwined. To explain this phenomenon, analysts have looked at innovations in transportation, communication, and productive techniques; as important, however, is the change in national policy that accompanied these technological changes. The ability and willingness of governments to open borders to goods and services produced outside...

  13. Bibliography
    (pp. 219-232)
  14. Index
    (pp. 233-242)