About the WTO
India - Patent Protection for Pharmaceutical and Agricultural Chemical Products - Complaint by the European Communities and their Member States
On 28 April 1997 the EC requested consultations with India in respect of the alleged absence in India of patent protection for pharmaceutical and agricultural chemical products and the absence of formal systems that permit the filing of patent applications of and provide exclusive marketing rights for such products. The EC contended that this is inconsistent with India’s obligations under Article 70 paragraphs 8 and 9 of the TRIPS Agreement (see similar US complaint in WT/DS50 where the Panel and Appellate Body reports were adopted on 16 January 1998).
Does Globalization Cause a Higher Concentration of International Trade and Investment Flows?
It has sometimes been argued that "globalization" benefits only a small number of countries and that this leads to greater marginalization of excluded countries. This paper argues that globalization is not necessarily biased towards greater concentration in international trade and investment flows. Marginalization is more likely to be explained by domestic policies in relatively closed countries. The paper shows that among relatively open economies the concentration of international trade and investment flows has declined over the last two decades whereas the opposite is true among relatively closed economies. Thus marginalization is not intrinsic to globalization. Key Words: Globalization international trade and investment flows concentration.
European Communities - Measures Affecting the Importation of Certain Poultry Products
On 24 February 1997 Brazil requested consultations with the EC in respect of the EC regime for the importation of certain poultry products and the implementation by the EC of the Tariff Rate Quota for these products. Brazil contended that the EC measures are inconsistent with Articles X and XXVII of GATT 1994 and Articles 1 and 3 of the Agreement on Import Licensing Procedures. Brazil also contended that the measures nullify or impair benefits accruing to it directly or indirectly under GATT 1994.
Indonesia - Certain Measures Affecting the Automobile Industry
On 3 October 1996 the EC requested consultations with Indonesia on 4 October 1996 and 29 November 1996 Japan requested consultations with Indonesia and on 8 October 1996 the US requested consultations with Indonesia concerning Indonesia’s National Car Programme. The EC alleged that the exemption from customs duties and luxury taxes on imports of “national vehicles” and components thereof and related measures were in violation of Indonesia’s obligations under Articles I and III of GATT 1994 Article 2 of the TRIMs Agreement and Article 3 of the SCM Agreement. Japan contended that these measures were in violation of Indonesia’s obligations under Articles I:1 III:2 III:4 and X:3(a) of GATT 1994 as well as Articles 2 and 5.4 of the TRIMs Agreement. The US contended that the measures were in violation of Indonesia’s obligations under Article I and III of GATT 1994 Article 2 of the TRIMs Agreement Article 3 6 and 28 of the SCM Agreement and Articles 3 20 and 65 of the TRIPS Agreement.
Exchange Rate Regimes and the Stability of Trade Policy in Transition Economies
This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies. In all these economies the rate of protection afforded domestic industry by the exchange rate has been eroded by high rates of inflation and insufficient growth in productivity. As a result there has been pressure on governments to increase trade barriers and each country examined has had recourse to various means of restricting imports. We argue that more flexible management of the nominal exchange rate would be a preferable way of dealing with the real appreciation of these countries’ currencies.
Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico
On 15 October 1996 Mexico requested consultations with Guatemala in respect of an anti-dumping investigation commenced by Guatemala with regard to imports of portland cement from Mexico. Mexico alleged that this investigation was in violation of Guatemala’s obligations under Articles 2 3 5 and 7.1 of the Anti-Dumping Agreement.
Australia - Measures Affecting Importation of Salmon
On 5 October 1995 Canada requested consultations with Australia in respect of Australia’s prohibition of imports of salmon from Canada based on a quarantine regulation. Canada alleged that the prohibition is inconsistent with Articles XI and XIII of the GATT 1994 and also inconsistent with the SPS Agreement.
European Communities - Customs Classification of Certain Computer Equipment
Complaints by the United States. These are in respect of the alleged reclassification by the European Communities for tariff purposes of certain Local Area Network (LAN) adapter equipment and personal computers with multimedia capability. The US alleged that these measures violate Article II of GATT 1994.
Can Bilateralism Ease the Pains of Multilateral Trade Liberalization?
Using the influence-driven approach to endogenous trade-policy determination we show how a free-trade agreement (FTA) with rules of origin can work as a device to compensate losers from trade liberalization. The FTA constructed in this paper is characterized by external tariff structures that are negatively correlated across member countries ensuring efficiency gains and through reduced average protection compatibility with the multilateral trading system's requirements. It is also politically viable and we demonstrate that in the countries concerned governments are willing to include its formation in the political agenda in spite of the fact that in equilibrium political contributions from producer lobbies decline after the agreement.
A Multilateral Agreement on Investment
Much has been recently written about the Multilateral Agreement on Investment (MAI) that has been negotiated by OECD countries. Perhaps even more has been said by the critics of those who would like to see an agreement of this kind extended among other countries. There has indeed been a great deal of "toing" and "froing" about the desirability of MAI and even misunderstandings about its merits. The principal question of this paper is whether there is any need for MAI. There are arguments in favour and against and this paper provides a short review. On balance the positive aspects of a multilateral agreement should outweigh the negative ones. The novelty of the paper is the attempt to address the critical voices. Given the lukewarm reaction in some countries it would seem sensible to pay more attention to these arguments – a feature that may only now become something of pressing need in the light of the difficulties encountered in the OECD negotiations.
Managing Capital Flows in Transition Economies with a Case-Study of Central and Eastern Europe
Management of capital inflows has unexpectedly become a major challenge in transition economies. These countries were expected to have an insatiable demand for foreign capital and an excess demand for capital inflows was therefore predicted by most observers. Foreign investors are also known to be very selective in their choice of markets and these countries were a big unknown. Moreover macroeconomic policy in these countries has been dominated by the objective of disinflation. We explain in this paper the reasons why some transition countries have been an attractive market for foreign investors and how important has foreign capital been for these countries. But the bulk of the paper provides an assessment of government policies to manage foreign capital inflows. We evaluate the policies against the background of different government objectives and in terms of the actual policy instruments used by the monetary authorities the timing and sequencing and the costs of these interventions. We argue that the initial responses to capital surges were poor; the authorities were reluctant to adjust their original policies and learn from the experiences elsewhere. Eventually their policy responses were changed but until the costs of inertia became too high. The authorities have effectively used sterilization policies more flexible exchange rate policies combined with tight monetary and fiscal policies. They also understood that an effective management of capital flows must start from well functioning markets and have been prepared to adopt structural policies whenever market imperfections could be identified.
Why are Trade Agreements more Attractive in the Presence of Foreign Direct Investment?
This paper argues that interests of nationals and owners of home-based foreign capital in the formation of a Trade Agreements (TA) are not antagonistic except under rather particular assumptions on initial tariffs among potential members. Further if initial tariffs are endogenously determined through an industry-lobbying process then TA that would have been immiserising in the absence of Foreign Direct Investment (FDI) may be welfare-enhancing in the presence of foreign-owned firms. The rationale is linked to the effect that the entry of FDI has on the pre-TA tariff through contributions to the incumbent government. These results may help explain recent integration programs between developed and developing countries.
Fiscal Policy Cycles and the Public Expenditure in Developing Countries
The paper studies empirically the fiscal policy instruments by which governments try to influence election outcomes in 24 developing countries for the 1973-1992 period. The study finds that the main vehicle for expansionary fiscal policies around elections is increasing public expenditure rather than lowering taxes and public investment cycles seem particularly prominent. Institutional mechanisms which constrain discretionary expenditure policies and which strengthen fiscal control are therefore worthwhile considering to prevent opportunistic policy making around elections.
United States - Import Prohibition of Certain Shrimp and Shrimp Products
On 8 October 1996 India Malaysia Pakistan and Thailand requested consultations with the United States concerning a ban on importation of shrimp and shrimp products from these complainants imposed by the US under Section 609 of US Public Law 101-162. Violations of Articles I XI and XIII of the GATT 1994 as well nullification and impairment of benefits were alleged.
Tying Governments' Hands in Commodity Taxation
In the 1970s taxation of "windfall" profits from primary products and intervention in trade and production tempted governments into expansionary fiscal policies whilst stifling the private sector and depressing growth. However the experience of the recent coffee boom has so far been more favourable: those African countries which liberalized and left a large share of the “windfall” with the private sector and which committed themselves to fiscal austerity via adjustment programs have shown better results in terms of fiscal stability private sector responses and economic growth than countries which did not reform. These findings suggest that constraints on discretionary government policies are desirable and that domestic institutions and international commitments could serve this purpose.
Multilateral Approaches to Market Access Negotiations
Market access negotiations in merchandise trade at the multilateral level cover tariffs and non-tariff measures (NTMs). While tariffs have been substantially reduced in earlier rounds they remain high in certain areas and further reductions involve a number of complex technical issues. Some formulae approaches not used in the Uruguay Round seem more favourable to developing countries. Elimination or phased reductions of NTMs in agriculture is one of the main areas for further market access negotiations in trade in goods. However most NTMs are now the subject to negotiations on the rules under which they may be applied e.g. in the areas of contingency protection and technical barriers to trade.
Transition Economies, Business and the WTO
Transition economies are going through a process of changing the role of the state allowing a greater role for the private sector. This is consistent with the market-oriented approach of the WTO. Remaining state agencies and enterprises will need to adapt their ways of doing business including in their approach to procurement of goods and services for economic and legal reasons. There is some hesitation about privatization as for foreign direct investment and where accepted about the precise timing. Where privatization of basic service monopolies occurs the role of the state shifts towards a regulatory function. In some private sector activities a non-interventionist approach to competition may be justified by market considerations while in others a pro-active policy may be necessary to ensure the benefits of economic liberalization.
Japan - Measures Affecting Consumer Photographic Film and Paper
On 13 June 1996 the United States requested consultations with Japan concerning Japan’s laws regulations and requirements affecting the distribution offering for sale and internal sale of imported consumer photographic film and paper. The US alleged that: the Japanese Government treated imported film and paper less favourably through these measures in violation of GATT Articles III and X. These measures nullify or impair benefits accruing to the US (a non-violation claim).
Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items
On 4 October 1996 the US requested consultations with Argentina concerning the imposition of specific duties on these items in excess of the bound rate and other measures by Argentina. The US contended that these measures violate Articles II VII VIII and X of GATT 1994 Article 2 of the TBT Agreement Article 1 to 8 of the Agreement on the Implementation of Article VII of GATT 1994 and Article 7 of the Agreement on Textiles and Clothing.
European Communities - Measures Affecting the Importation of Certain Poultry Products
On 24 February 1997 Brazil requested consultations with the EC in respect of the EC regime for the importation of certain poultry products and the implementation by the EC of the Tariff Rate Quota for these products. Brazil contended that the EC measures are inconsistent with Articles X and XXVII of GATT 1994 and Articles 1 and 3 of the Agreement on Import Licensing Procedures. Brazil also contended that the measures nullify or impair benefits accruing to it directly or indirectly under GATT 1994.