POLI 354 Lecture Notes - Lecture 11: Uruguay Round, General Agreement On Tariffs And Trade, Free Trade
13 May 2018
School
Department
Course
Professor
!"#$%&'(% % )$*+,-%./0(%
Poli%358%Lecture%11:%The%World%Trade%organization:%Background%and%bargaining%process%
20th%February%2018%
%
Legend:%123456%7897:%;324%<6=>8<?%italics:(what(the(professor(said(in(class,(over(and(above(the(slides(
%
Finished(with(the(firs(part(of(the(course-(main(theories(and(concepts(related(to(international(
cooperation(
: Realist(theory-(HST(
: Theory(related(to(institutions-(focus(on(transaction(cots-(NIE(
: Models(that(explain(the(bargaining(and(enforcement(stage(of(cooperation(
: Domestic(politics(exampling(bargaining(and(enforcement((
: Nuanced(idea-(talking(about(different(designs(of(institutions-(same(types(that(are(designed(
differently(
Second(part-(mostly(about(trade(cooperation(and(governance((
WTO-(basic(and(more(advanced(theories(relate(to(the(WTO-(basic(and(first(way(countries(deal(with(
trade(
PTAs-(see(the(relationship(between(multilateral(and(preferential(relations(
FDI(and(bilateral(investment((
%
Table%of%contents%
: +@8%AB++C)+"%D3=1E=D68<%51>%F53G5=1=1G%D32E8<<%
o Case(about(the(power(in(the(WTO(and(how(th(power(shapes(relations(in(the(WTO%
: #HI<%51>%7@8%)+"J%7@8%E5<8%2;%7@8%H2@5%32K1>%%
o Why(this(is(never(ending,(unprecedented(because(previous(rounds(were(always(
concluded(%
: )@2%G87<%5%G22>%>856%=1%7@8%)+"%BEE8<<=21L%
o Pelc’s(reading(%
%
Genesis%of%the%GATT%
: +@8%A818356%BG3884817%21%+35>8%51>%+53=;;%MAB++N%E548%=172%89=<781E8%=1%0OPQ%
o Soon(after(the(end(of(the(war%
: -8<K678>%=1%<KF<7517=56%38>KE7=21<%=1%753=;;<%51>%27@83%F533=83<%72%735>8%51>%=1%
>=<E3=4=15723R%738574817%=1%=1783157=2156%E24483E8%
o Especially(in(the(manufacturing(sector%
: ,=G@7%32K1><%2;%18G27=57=21<%@5S8%75T81%D65E8%>K3=1G%;=S8%>8E5>8<%2;%=7<%89=<781E8%%
o Main(proponent(was(the(US,(but(it(was(a(compromise(of(between(the(preferences(of(
the(US(and(UK-%
o UK(got(a(good(deal(in(terms(of(MFN(tariffs-(they(maintain(discriminatory(access(to(
commonwealth(countries(in(violation(of(the(MFN(principles%
o Unfair(to(say(that(GATT(was(imposed(on(the(weak(European(nation(%
%
Was%the%GATT%a%Success?%!"#$%&'(
: BE@=8S84817<%
o +53=;;<%2;%HI%@5S8%>54D818>%;324%P/U%5;783%)).%72%'U%12VW%
o ,E2124=E%89D51<=21%2;%7@8%0O'/<%51>%X/<%=<%72%F8%5773=FK78>%72%AB++%M$3V=1%0OO'N%
o $4D237517%72%<87%<751>53><%;23%E24483E=56%D26=E=8<Y%5<<K3=1G%7@57%753=;;%68S86<%E2K6>%
42S8%216R%=1%218%>=38E7=21%%
!"#$%&'(% % )$*+,-%./0(%
o A(lot(of(the(growth(in(japan(an(Europe-(credited(to(GATT-(export(led(growth(–(every(
successful(development(story(is(export(led(growth(%
o The(tariffs(moved(only(in(one(direction-(never(ever(saw(an(increase(in(tariffs,(but(
now(this(might(change-(see(countries(who(are(thinking(about(forms(of(protection-(
getting(out(of(NAFTA,(Brexit(etc%
: Z5=6K38<%
o A5D=1G%@268<%=1%7@8%AB++%E2S835G8:%5G3=EK67K38%51>%7897=68<%
§ Most(of(the(tariff(cuts(happened(in(the(manufacturing(sector-(holes(in(the(
coverage-(tariffs(in(some(sectors(stayed(high(%
§ Agriculture(and(textile-(where(US(and(EU(have(comparative(disadvantage(–(
afraid(of(liberalization(%
§ When(developing(countries(complained(that(GATT(was(west(centric-(this(
wasn’t(nonsense,(because(trade(liberalization(was(mainly(in(sectors(where(
developed(countries(had(a(comparative(advantage%
o *8V%D3278E7=21=<7%7226<:%S26K1753R%38<735=17%5G3884817<%51>%517=:>K4D=1G%
485<K38<%
§ GATT(couldn’t(keep(check(on(hidden(forms(of(protectionism%
o #HI<%3845=18>%653G86R%2K7<=>8%7@8%AB++%
%
Genesis%of%the%WTO%
: I548%=172%89=<781E8%=1%[51K53R%0OO'Y%V=7@%7@8%E21E6K<=21%2;%7@8%\3KGK5R%-2K1>%
]K67=6578356%+35>8%*8G27=57=21<%=1%BD3=6%0OOP%
: ^_%=1%A818S5%
: GATT(wasn’t(much(of(a(formal(institution%
: ^5<%0XP%484F83%E2K173=8<%
: -8657=S86R%<4566%E24D538>%72%27@83%$"<:%<75;;%2;%216R%X&'%D82D68%51>%FK>G87%2;%0P/%4=66=21%
o )`%@5<%<75;;%2;%O&//%D82D68%51>%FK>G87%2;%0%4=66=21%%
%
%
Two%main%differences%between%%the%GATT%and%the%WTO%
: Ha]%
o $;%5%E2K173R%@5<%F881%;2K1>%GK=67R%2;%S=2657=1G%5%)+!%3K68%FK7%Ha`Y%7@8%<548%E2K173R%
E51b7%S872%7@8%5DD6=E57=21%2;%=7<%2V1%38<26K7=21%Mas(it(could(in(the(GATT)%
: +-$!<Y%+-$]<%51>%AB+a%
o -8GK657=1G%$!-<Y%=1S8<74817%51>%<83S=E8<%Mliberalizes(the(service(sector)%38<D8E7=S86R%%
o Non-tariff(issues(became(prominent(in(the(WTO%
o Developing(countries(against(including(these(in(the(WTO-(reason(they(accepted(
them(because(they(were(blackmailed-(wouldn’t(get(MFN(status(and(since(they(
needed(market(access,(they(agreed%
o They’re(poorly(enforced(by(the(WTO-(which(is(why(countries(moved(from(the(WTO(
to(PTAs(where(its(easier(to(enforce(them.%
%
Two%basic%principles%
: ]53T87%6=F8356=<4%:%embraces(neoclassical(economics(%
: *21:>=<E3=4=157=21%%
%
%
Market%liberalism%%
!"#$%&'(% % )$*+,-%./0(%
: B<<837<%7@57%51%2D81%23%6=F8356%=1783157=2156%735>8%<R<784%35=<8<%7@8%V236><%<751>53>%2;%
6=S=1G%%
: ,S83R%E2K173R%c%D223%23%3=E@%81d2R<%5%@=G@83%<751>53>%2;%6=S=1G%V=7@%735>8%7@51%=7%E51%
5E@=8S8%V=7@2K7%735>8%
: +@8%G5=1<%;324%735>8%538%7@8%G38578<7:%;23%85E@%E2K173R%51>%;23%7@8%V236>:%V@81%G22><%E51%
;62V%;3886R%5E32<<%157=2156%F23>83<%K1=4D8>8>%FR%G2S8314817%=4D2<8>%F533=83<%
: "18%2;%7@8%D=6653<%2;%84F8>>8>%6=F8356=<4%%
o Compromise(between(liberalization(from(the(GATT(and(welfare(system(in(line(with(
Keynesian(views(for(economies(to(navigate(the(economic(turmoil(
%
Non-discrimination%
: I51%F8%<D8E=;=8>%=1%7V2%;234<%
o ]Z*:%42<7%;5S238>%157=21%<757K<%
§ Cant(discriminate(with(other(WTO(member(countries(–(need(to(set(the(same(
level(of(tariffs(with(all(countries(%
o *+:%157=2156%738574817%%
§ Cant(discriminate(between(foreign(and(domestic(firms(%
%
MFN%
: B37=E68%0:%AB++%
: !32@=F=7<%G2S8314817<%;324%K<=1G%735>8%D26=E=8<%72%D32S=>8%<D8E=56%5>S5175G8%72%<248%
E2K173=8<%51>%127%72%27@83<%
: -8eK=38<%85E@%484F83%72%73857%566%)+"%484F83<%=1%7@8%<548%V5R%5<%7@8R%73857%7@8=3%
;5S23=78%735>=1G%D537183%%
%
Two%main%exceptions%
: A2S8314817<%5662V8>%72%>8D537%=;%7@8R%d2=1%5%!+B%M537=E68%.PN%that(substantively(enhance(
trade(between(the(participants%
o Explaining(NAFTA-(members(of(the(WTO(who(see(much(lower(tariffs-(NAFTA(did(
increase(trade(among(the(members(and(so(they(were(allowed(to(violate(MFN(to(
reduce(tariffs.(%
o Why(do(you(have(this?(They(understood(that(implementing(trade(liberalization(is(
hard-(want(non-discrimination,(but(if(you(go(above(and(beyond(what(you(decide(to(
do(within(the(WTO(like(in(PTAs,(then(you(will(not(be(punished(%
o Threshold(of(substantive(liberalization~(90%((of(the(tariffs(of(to(0(very(fast%
: A818356=f8>%<R<784%2;%D38;8381E8<%M0OX/N%5662V<%7@8%5>S51E8>%=1>K<73=56=f8>%E2K173=8<%72%
5DD6R%62V83%753=;;<%72%=4D237<%;324%>8S862D=1G%E2K173=8<%%
o Concession(that(the(developed(countries(gave(to(developing(countries%
o Developing(countries(could(export(things(to(large(markets(without(facing(high(
barriers(%
%
National%treatment%%
: B37=E68%&%2;%7@8%AB++%
: !32@=F=7<%G2S8314817<%;324%K<=1G%7598<Y%38GK657=21<%51>%27@83%>248<7=E%D26=E=8<%72%D32S=>8%
51%5>S5175G8%72%>248<7=E%;=34<%57%7@8%89D81<8%2;%;238=G1%;=34<%
: -8eK=38<%G2S8314817<%72%73857%>248<7=E%51>%;238=G1%S83<=21<%2;%7@8%<548%D32>KE7%<=4=6536R%
21E8%7@8R%81783%7@8%>248<7=E%453T87%%
Example%
Document Summary
Poli 358 lecture 11: the world trade organization: background and bargaining process. Legend: normal text- from slides; italics: what the professor said in class, over and above the slides. Finished with the firs part of the course- main theories and concepts related to international cooperation. Theory related to institutions- focus on transaction cots- nie. Models that explain the bargaining and enforcement stage of cooperation. Nuanced idea- talking about different designs of institutions- same types that are designed differently. Second part- mostly about trade cooperation and governance. Wto- basic and more advanced theories relate to the wto- basic and first way countries deal with trade. Ptas- see the relationship between multilateral and preferential relations. The gatt/wto principles and bargaining process: case about the power in the wto and how th power shapes relations in the wto. Ldcs and the wto: the case of the doha round: why this is never ending, unprecedented because previous rounds were always concluded.
