The GATT as international discipline over trade restrictions: a public choice approach

Joseph Finger

No 402, Policy Research Working Paper Series from The World Bank

Abstract: The General Agreement on Tariffs and Trade (GATT) was built on a mercantilist sense of economic welfare and a mercantilist sense that domestic producers had a higher claim than foreign producers to the domestic market. The trade negotiations process did not attack this claim. It gave producers in each country an opportunity to increase its value through mutually beneficial exchanges with producers in other countries. The process worked as long as institutions forced all producers in a country to reach a collective decision on trade policy. Another mutation of GATT institutions has begun with the development in the United States of"301", which provides a way for exporting producers to advance their interests without bearing the burden of suppressing or buying off import competing interests. Indeed,"301"attacks foreign restrictions not with the possibility of fewer U.S. restrictions, but with the threat of more. Trade remedy processes have been installed in many countries, so"301s"should not be far behind. The GATT system was devised to promote global security and free trade. In the present system, export interests will generate trade conflicts and import competing interestswill generate trade restrictions. Simply put, the institutions that shape the relevant public choices do not bring out the appropriate economic interests, and the resulting policy choices are not those that promote economic efficiency.

Keywords: Trade Policy; Rules of Origin; Environmental Economics&Policies; Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT (search for similar items in EconPapers)
Date: 1990-03-31
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Citations: View citations in EconPapers (5)

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