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Chapter 5

PSCI 2602 Chapter Notes - Chapter 5: General Agreement On Tariffs And Trade


Department
Political Science
Course Code
PSCI 2602
Professor
Supanai Sookmark
Chapter
5

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Chapter 5 The Evolution of the Global Trade Regime
Introduction
The global trade regime is a rules-based political system where the rules flowing from
international agreements that seek to promote and stabilize economic exchanges
between countries are ranged against the regulations of national governments that
often restrict those exchanges. (112)
Purpose
o Reduce the protectionism of national regulations
o Reduce the uncertainty and unpredictability of international trade relations
o Promote stability (112)
Historical antecedents: 1860 to 1945
The golden age of liberalism
Organized efforts to establish freer and non-discriminatory trade in Europe began in the
middle of the nineteenth century
A lengthy period of protectionism was initiated by the world depression that began in
the 1870s, and then continued as a result of the world wars and depression of the first
half of the twentieth century.
Efforts to establish a liberal international trading system were begun with the US RTAA
of 1934.
The birth of the GATT
Post-war economic situation
Following WW2 the US was a preponderant presence in the world economy, and took a
leadership role in post-war planning.
Trading nations established the GATT, in 1947, and attempted in 1948 to create an ITO,
which failed to receive ratification by the US congress
Embedded liberalism
o Compromise, which effectively established a middle ground between various
forms of unfettered economic liberalism and Keynesian domestic
interventionism.
Global Trade Regime
o Based on a negotiated consensus
o The real world consensus is often only achieved through compromises that are
unpalatable to the purists. (117)
The rules of the GATT
o The Objectives of the GATT were to promote economic growth and prosperity through
the expansion of international trade. This was to be achieved through the reduction of
tariffs and the elimination of discrimination in industrial and manufactured products.
o The GATT rules provided a rudimentary basis for the regulation of international trade.
o Reciprocity is a normal aspect of negotiations in general.
o Reciprocity has been promoted as a political imperative where nations give trade
concessions in the form of tariff reduction or market access in order to get similar
benefits from their partners. (118)
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