Global, Regional and National Governance of Trade Flashcards
What are examples of national trade policies?
- Tariffs
- Subsidies
- Import quotas
- Administrative policies
- Local content requirements
- Anti-dumping measures
What is an example of a tariff?
Trump accusing China of unfair trading practices, both retaliated and imposed tariffs on each others’ goods
What is an example of a subsidy?
India sugar subsidy regime - Indian gov to provide 10,448 rupees of per tonne sugar exported
What is an example of an import quota?
EU-US beef import quota: 35,000 tonnes of beef imported from US, limits competition, a limit on the quantity that can be exported to a market
What are administrative policies?
Standards that have to be met to be accepted in countries, passporting loss after Brexit (passporting allows a firm registered in the EEA to bro business with any other EEA state without needing further authorisation from each country)
What are local content requirements?
Requirement of a certain % of goods used in production processes to be sourced from domestic manufacturers
e.g USMCA trade deal - foreign car manufactures to use local ports and produce locally
What are anti-dumping measures?
Protectionist tariff on foreign imports believed to be priced below fair market value.
e.g EU duties on e-bikes from China
What are motives for intervention?
- National security
- Health
- Re-election
- Trade deficit
- Boost domestic economy
- Please voters –> reduce unemployment –> self sufficiency
What is GATT in terms of international governance of trade?
General Agreement on Tariffs and Trade
Purpose is to promote international trade and remove barriers.
Governed world trade 1947-1995
What are the limitations of GATT?
- Products, not services
- Focus on tariff negotiation
- Agreements not binding: no enforcement or legal legitimacy
- Series of multilateral rounds (Uruguay Round 1986-1993)
- Minimal benefits for less developed countries
- Diverse membership with diverse political and economic interests
What is the World Trade Organisation (WTO) in terms of international governance of trade?
- Created in Uruguay round in 1995
- Role: enforcement and policy powers
- Forum for trade negotiations
- Handles disputes, monitors trade agreements
- Provides assistance to developing countries
- 150 members
How wide is the scope of world trade agreements?
Uruguay rounds = wide scope
- Opening up of previously closed industries
- Substantial reduction of tariffs and subsidies
- 1940s - present average tariffs declined 40%-4%
- Intellectual property and Investment
What are the principles the WTO’s trade approach?
- Countries should engage in negotiations to remove trade barreirs
- Countries are bound by the outcomes of trade negotiations
- ‘Unfair’ practices discouraged
Why is the WTO bad for developing nations?
Developing countries need some protectionism to develop new industries and diversify their economies
Infant industry argument: developed nations pulling away the ladder they used themselves to climb up
What are some other limitations of the WTO?
- Most favoured nation principle - idea that trade should be without discrimination - not good for local firms
- Failure to reduce tariffs on agriculture
- Ignores environmental considerations
