Trade monitoring
Executive summary
On 1 January 2008 the multilateral trading system will celebrate its sixtieth anniversary. The World Trade Report 2007 marks the occasion with a retrospective look at what we have learned from those six decades of international trade cooperation. In asking this question the report reviews a rich history of change and institutional adaptation. It attempts to identify both what lessons are to be drawn from past experience and the nature of challenges to come. This is an ambitious undertaking and we have divided the Chapter into three main sections. The first major Section (Section B) begins with a very brief historical review of what the trade policy world looked like in the century and a half before the birth of the GATT. The rest of this Section takes a step back from events to consider what the theoretical literature might teach us about why nations choose to cooperate with one another in trade matters. This is an eclectic review that draws on perspectives from economics political economy political science and international relations literature as well as legal analysis. We seek to show that despite differences in their methodological approach these different conceptual frameworks display some interesting features in common. They also offer a variety of different insights about what might drive cooperation.
Acknowledgements
The World Trade Report 2007 was prepared under the general direction of Deputy Director-General Alejandro Jara. Patrick Low Director of the Economic Research and Statistics Division led the team responsible for writing the Report. The principal authors of the Report were Marc Bacchetta K. Michael Finger Matthias Helble Marion Jansen Alexander Keck Mark Koulen Pete Pedersen Roberta Piermartini Simon Schropp and Robert Teh. Trade statistics information was provided by the Statistics Group of the Economic Research and Statistics Division coordinated by Hubert Escaith Julia de Verteuil Andreas Maurer and Jürgen Richtering. Karen McCusker contributed a subsection on restrictions to safeguard the balance of payments in developing countries.
Foreword
The World Trade Report 2007 is the fifth in a series launched in 2002. This year’s Report marks sixty years of multilateralism in trade through the GATT/WTO. On 1 January 1948 the GATT came into being with 23 signatories. Six decades on at the beginning of next year we celebrate a WTO with over 150 Members. This is an institution that has changed and grown in fascinating ways striving to meet the challenges posed by increasingly complex trade relations in a globalizing world. The GATT/WTO has evolved from its comparatively modest focus in the early years on reducing and binding tariffs on manufactured goods to encompass a deeper and wider set of disciplines across a range of policy areas. At the same time over sixty years the system has brought together a growing number of nations at different levels of development with varied policy priorities in a cooperative endeavour to forge an international trade policy regime that promises mutual gain.
Recent trends in international trade
The year 2006 witnessed robust growth in the world economy and vigorous trade expansion. According to data available in April 2007 which has been used in this section global gross domestic production (GDP) growth accelerated to 3.7 per cent the second best performance since 2000. All major regions recorded GDP growth in excess of population growth.
World Trade Report 2007
On 1 January 2008 the multilateral trading system will celebrate its sixtieth anniversary. The World Trade Report 2007 marks the occasion with a retrospective look at what we have learned from those six decades of international trade cooperation. In asking what we have learned the report reviews a rich history of change and institutional adaptation. It attempts to identify both what lessons are to be drawn from past experience and the nature of challenges to come. The World Trade Report is useful for policymakers and for any individuals or groups interested in global trade policy.
The design of international trade agreements
In Section B we discussed a range of reasons why nations may share an interest in cooperating with one another in trade matters. In this section we extend the analysis to examine fundamental issues of treaty design focusing on two main questions. First what are the core rules that any good trade agreement must contain so as to reap the envisaged benefits from cooperation? Second how does the creation of a formal organization (or institution) ensure the effectiveness of rules and foster the objectives of an agreement?
Selected trade developments and issues
In December 1996 at the first WTO Ministerial Conference held in Singapore 23 economies signed the Information Technology Agreement (ITA). The objective of the ITA was to “encourage the continued technological development of the information technology industry on a world-wide basis” and to “achieve maximum freedom of world trade in IT products” by eliminating all duties on trade in these products. Lower barriers to trade should help to spread “the positive contribution of IT to global economic growth and welfare”.1 The ITA went into force in 1997 when the trade value of the participants exceeded 90 per cent of world trade in the covered products – the benchmark stipulated in the Agreement. Ten years on the information and communication industry is seen as a major engine of the globalisation process transforming both the developed and developing economies. The rapid development of the internet (1 billion users in 2005) and the global spread of cellular mobile telephony (2.1 billion subscribers in 2005) are two prominent examples of the increased role of IT in today’s global economy. The spread of IT technologies has created many new business opportunities transformed many services sectors and challenged many old patterns of production and distribution.
Introduction
On 1 January 2008 the multilateral trading system will celebrate its sixtieth anniversary. The World Trade Report 2007 marks the occasion with a retrospective look at what has been learned from those six decades of international trade cooperation. It attempts to identify both what lessons are to be drawn from past experience and the nature of challenges to come. To address these issues the report adopts an eclectic approach drawing from the economic literature as well as from economic history international relations or legal approaches. The objective of the report is to explore the lessons to be learned from the rich history of change and institutional adaptation of the multilateral system.