The World Trade Organization in the New Global Economy
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The World Trade Organization in the New Global Economy

Trade and Investment Issues in the New Millennium Round

Edited by Alan M. Rugman and Gavin Boyd

Despite the disruption of the multilateral trade talks at Seattle in December 1999, the work of the World Trade Organization (WTO) continues. The trade and investment issues that have been outstanding since the Seattle events are explored in this far reaching book. The distinguished contributors combine several analytical approaches for a comprehensive assessment of the trends, problems and opportunities demanding attention in international trade negotiations.
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Chapter 6: The USA in the WTO

Thomas L. Brewer and Stephen Young


Thomas L. Brewer and Stephen Young ABSTRACT The industry structure of the US economy and the international strategies of firms are key elements of the political economy of US trade policymaking. A principal feature of the US economy is the increasing dominance of the services sector and the declining importance of the agricultural, mining and manufacturing sectors. A principal feature of firms’ strategies is their increased reliance on international ownership and movement of factors of production through foreign direct investment (FDI). These structural and strategic tendencies, furthermore, interact and thus shape the policy agenda and the central tendencies of US policy. This chapter analyses these structural and strategic trends and their relationships to US policies concerning three types of World Trade Organization (WTO) issues: meta-institutional issues, sector-specific agreements, and dispute settlement cases. The analysis emphasizes the importance of the General Agreement on Trade in Services (GATS), including its provisions concerning FDI. INTRODUCTION United States policies on WTO-related issues are shaped by a combination of economic and political conditions. The economic conditions of particular importance include: (1) the structure of the US economy, in which services have become relatively more important; and (2) the international business strategies of firms, which have come to rely more on foreign direct investment, relative to cross-border trade. Both of these changes have significantly altered the economic interests that business groups promote in the policymaking process, and they also therefore affect the agenda and other key features of the politics of specific issues....

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