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Conflict, Chaos and Confusion

Conflict, Chaos and Confusion

The Crisis in the International Trading System

William A. Kerr

After 15 years the WTO is not functioning as envisioned and is faced with many new trade challenges − climate change, terrorism, pandemics, genetically modified organisms, food safety − which it is ill-equipped to handle. Conflict, Chaos and Confusion sheds light on this deep and acute crisis, focusing on contentious and complex new trade issues and how they will affect international trade in the future.

Chapter 19: Political Precaution, Pandemics and Protectionism

William A. Kerr

Subjects: economics and finance, international economics


Chinese President Hu Jintao Tuesday ordered the country to step up inspection and quarantine measures to prevent swine flu from entering China and ensure public health and safety … China’s Agriculture Ministry and quality watchdog issued a joint notice on Monday suspending all imports of live pigs or products containing pork from Mexico and the US states of Texas, California and Kansas. China View, 28 April 2009 [T]he imposition of ban measures related to the import of pigs and pig products from countries with human cases of A/H1N1 are pointless and do not comply with international standards published by the OIE and all other competent standard setting international bodies for animal health and food safety … World Organisation for Animal Health, Press release, 11 June 2009 1. INTRODUCTION It is sometimes appropriate to stand back and revisit some basic questions such as: Why do countries negotiate trade agreements?1 In the first instance, trade agreements are negotiated to reduce the uncertainty associated with capricious restrictions on market access for firms which wish to invest in international commercial activities.2 In essence, trade agreements establish rules that put limits on the ability of governments to impose barriers to market access (and other trade-distorting policies). While the benefits of reducing trade barriers are often discussed in terms of welfare enhancement, the crux of the matter is whether firms that see a profitable opportunity in international commerce feel that their investments in such activities are sufficiently secure to allow the investments to go forward. From...

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