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 2: International Agreements

David Hanson

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


INTRODUCTION International trade does not take place in a legal vacuum. An elaborate system of international agreements has been developed since 1945 that is intended to protect and promote the emergence of a global market in goods and services. Even when the provisions of these agreements are not directly on point on a particular trade issue, they frame the expectations of the international community in the area of free trade and intergovernmental relations. In some cases, the complaints that each of our three polities raise about the other two can only be understood in the context of these agreements. The most ambitious period of international negotiations took place during the Uruguay Round. The final agreement for the Round was signed on 15 April 1994. In total, there were about 60 agreements approved during the Round. The 15 most important were listed as annexes to the master agreement establishing the World Trade Organization. In addition, there were a series of “plurilateral” trade agreements that only included some of the WTO membership, as well as a series of unilateral ministerial decisions. This chapter will focus on the 15 agreements included in the annexes to the Final Act (World Trade Organization, 1994k). The number, scope and detail of these agreements is one indication of the complexity of the international marketplace. This situation relates to an issue mentioned in Chapter 1: are the institutions and procedures supporting international trade up to the political issues and regulatory challenges posed by government policies affecting international trade...

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