Global Trade Regulation Since 1945

6

The United States led in the belief that international trade and investment flows were a key to world wide prosperity

Culminate in (with) sth

The background of the formation of ITO

It was designed to cover international commercial policies, restrictive business practices, commodity agreements, employment and reconstruction, economic development and international investment and a constitution for a new United Nations agency to administer the whole.

Why did ITO fail? Most nations refused to ratify its provisions. They feared the power and bureaucratic siz

e of the new organization------and the consequent threats to national sovereignty.

Characterisitcs for ITO: (1)Incorporated many far-sighted notions (2)most forward-looking approach

Brief history of GATT Because the ITO never came into being, the

GATT became the governing body for settling international trade disputes.

Gradually, it evolved into an institution that sponsored various successful rounds of international trade negotiations.

Headquatered in… Conducts its work as instructed by…

Brief history of GATT It started out in 1947 as a set of rules to ensure no

ndiscrimination, transparent procedures, the settlement of disputes, and the participation of the lesser-developed countries in international trade.

To increase trade GATT uses tariff concessions, through which member countries agree to limit the level of tariffs they will impose on imports from other GATT members.

An important tool is the Most-Favored Nation.

MFN clause calls for each member country to grant every other member country the same most favorable treatment which it accords to any other country with respect to imports and exports.MFN in effect, provides for equal, r

ather than special treatment.

Achievements of GATT Early in its history, the GATT accomplished t

he reduction of duties for trade in 50,000 products, amounting to two-thirds of the value of the trade among its participants.

In subsequent years, it further reduced trade barriers and improved dispute-settlement mechanisms.

It also developed better provisions for dealing with subsidies and more explicit definitions of roles for import controls.

How did WTO come into being? The GATT was supplanted by a new instituti

on, the World Trade Organization (WTO), which now administers international trade and investment accords.

In the latest GATT negotiations, the importance of tariffs has been greatly diminished due to the success of earlier agreements.

The main thrust of negotiations had become the sharpening of dispute-settlement rules and the integration of the trade and investment areas that were outside of the GATT.

WTO is to:

gradually reduce gonernment subsidies to industries

convert nontariff barriers into more transparent tariff barriers

bring the textile and clothing industries into the WTO regime, resulting in decreased subsidies and fewer market restrictions.

govern service area Phrase: agreement be reached on … to do…

Contributions of the GATT and the WTO

They have made major contributions to improved trade and investment flows around the world.

The latest round alone was predicted to increase global exports by more than $755 billion by the year 2002

Nations have increasingly come to recognize that international trade and investment activities are important to their own economic well-being.

Nations also have come to accept that they must generate sufficient outgoing export and incoming investment activities to compensate for the inflow of imports and outgoing of investment. In the medium and long term, the balance of payments must be maintained. For short periods of time, gold and capital transfers can be used to finance a deficit.

各国还意识到， 只有创造充分的出口流入和投资收入才能弥补进口的流出和投资支出产生的成本。从中长期看，一个国家必须维持国际收支的平衡。短期内，黄金和货币支付凭证可以用于弥补国际收支赤字。

Such financing, however, can continue only while gold and foreign assets last or while foreign countries will accept the IOUs of the deficit countries, permitting them to pile up foreign libilities. This willingness, of course, will vary. Some countries, such as the United States, can run up deficits of hundreds of billions of dollars because of political stability, acceptable rates of return, and perceived economic security. Yet, over the long term, all nations are subject to the same economic rules.

但是若要继续增加本国的债务，前提是必须保证黄金和国外资产仍然存在，或对方国家接受赤字国的上述货币性凭证。当然，这种接受性因国而异。有些国家，例如美国，由于其自身政治稳定，收益汇报率较高，经济预期良好，因而可以积累数以千万亿美元的国际收支赤字。但是从长期看，各国均受相同的经济法则约束。

Changes in Global Policy Environment

Three major changes: A reduction of domestic policy influence A weakening of traditional international instit

utions A sharpening of the conflict between industri

alized countries and developing counrtries

Reduction of Domestic Policy Influences

The effects of growing global linkages on the domestic economy have been significant.

It is very difficult to isolate domestic economic activity from international market events.

Domestic plolicy measures are ofen vetoed or counteracted by the activities of global market forces.

How can international factors shape or direct domestic economic policy?

6 A liberalized and global capital market limits government’s ability to abuse their traditional base of economic power: the ability to tax, the ability to print money, and the ability to borrow. If a government borrows recklessly or allows inflation to creep up, for example, investors will seek refuge in another currency.

All that is being lost is the power to pursue damaging policies.

“Foreign financial institutions can play a useful role because closed financial systems tend to be inefficient, corrupt and bound up in politics”

7. The danger of the growing capital market may not be the market itself, but government’s temptation to respond to market excesses by trying to force the global capital market into a straitjacket.

资本市场扩大的真正威胁不在于市场本身，而是政府对市场盈余的过分贪婪，因为在这种条件下，政府常常会不自觉地以国家政策来束缚全球性地资本市场，以期实现自身利益的最大化。 As global financial markets become more int

egrated, the reward for pursuing the right policies will become bigger.