Limits to Free Trade

Limits to Free Trade

Non-Tariff Barriers in the European Union, Japan and United States

David Hanson

This book explores the growing list of non-tariff trade barriers raised by the US, EU and Japan and assesses the prospects for significant trade liberalization. The author examines the liability of global free trade through a review of the complaints that these three countries raised about each other over a five-year period. He concludes that free trade may be increasingly hampered as barriers are created more rapidly than can be resolved, and that the prospects for significantly strengthening safeguards are limited.

Chapter 1: Dilemmas of Free Trade

David Hanson

Subjects: business and management, international business, economics and finance, international economics


Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods, Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce, Have through their Representatives agreed as follows . . . (Preamble, General Agreement on Tariffs and Trade (1947), at: english/docs_e/legal_e/gatt47_01_e.htm) 1. INTRODUCTION On 1 January 1948, delegates from 23 countries brought the UN Conference on Trade and Employment at Marrakesh, Morocco, to an apparently successful conclusion by signing the General Agreement on Tariffs and Trade (GATT). Unfortunately, the US senate refused to ratify the Convention, and it became a legal dead letter. The enforcing agency, the proposed International Trade Organization, was never organized. Fortunately, President Truman decided to proceed as if GATT were the law of the land. The results have been spectacular. The nations of the world have negotiated tariff reductions through a 50-year series of multinational negotiating “rounds”. A toothless GATT has been replaced by a far more powerful World Trade Organization (WTO). A series of companion agreements have been negotiated that extend the trading rules to cover a wide range of...

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