HECOL441 Lecture Notes - Lecture 9: General Agreement On Tariffs And Trade, World Trade Organization, Comparative Advantage

• School: University of Alberta
• Department: Human Ecology
• Course: HECOL441
• Professor: Lori Moran

Document Summary

Gatt was a forerunner of wto and was relate of us e orts to adopt a multilateral as opposed to bilateral approach to solving trade issues. However, in 1960, with pressure from developed countries, concept of market disruption is incorporated into gatt and allows restrictions on a country speci c basis. The mfa is to gatt as a brothel is to a cathedral. Primary criticism is that mfa removed a major sector of world trade from gatt rules. Made quotas permissible and idea of market disruption as a tool of protectionism viable for years. Leads to growth of t&c industries in countries with no manufacturing base bud who had major labour resources; begins process of quota chasing. Conversely, countries with comparative advantage in manufacturing and industrial capacity were arti cially restrained in exporting their full potential. Create a situation that goes against the very spirit of liberalization.