Article About Trade Agreement

A clause on “national treatment of non-tariff restrictions” is needed, as most tariff characteristics can be easily duplicated with a set of non-tariff restrictions designed accordingly. These may include discriminatory rules, selective consumption or turnover taxes, specific “health” requirements, quotas, “voluntary” import restrictions, special licensing requirements, etc., not to mention any total ban. Instead of trying to list and prohibit all kinds of non-tariff restrictions, the signatories of an agreement ask for treatment similar to that accorded to products of the same type (e.g. steel.B. manufactured in the domestic market. While free trade offers overall benefits, the removal of a barrier to trade for a given good harms the shareholders and employees of the domestic industry that produces that good. Some of the groups affected by foreign competition have sufficient political power to protect themselves against imports. Therefore, despite their considerable economic costs, trade barriers remain. For example, according to the U.S. International Trade Commission, the U.S. profit on lifting trade restrictions on textiles and clothing was nearly $12 billion in 2002 alone.

This is a net economic profit after deduction of losses incurred by enterprises and workers in domestic industry. Nevertheless, domestic textile producers managed to convince Congress to maintain strict import restrictions. In most modern economies, the possible coalitions of interested groups are numerous and the diversity of potential unilateral barriers is great. In addition, some trade barriers are created for other non-economic reasons, such as. B national security or the desire to preserve or isolate local culture from foreign influences. It is therefore not surprising that successful trade agreements are very complicated. Some common features of trade agreements are reciprocity (1), (2) a most-favoured-nation clause and (3) domestic treatment of non-tariff barriers. Although the WTO embodies the principle of non-discrimination in international trade, Article 24 of the GATT allows for the creation of free trade areas and “customs unions” among WTO members. A free trade area is a group of countries that remove all tariffs on trade, but remain autonomous in determining their tariffs with non-members. A customs union is a group of countries that remove all trade customs duties between them, while maintaining a common external right on trade with non-EU countries (which technically undermines the highest remuneration). One of the motivations for these standards is the fear that unconditional trade could lead to a “race to the bottom” in terms of labour and environmental standards, given that multinationals are singing the globe in search of low wages and lax environmental rules in order to reduce costs.

Yet there is no empirical evidence of such a breed. In fact, trade usually involves the transfer of technology to developing countries, which makes it possible to increase wage rates, as the Korean economy – among many others – has shown since the 1960s. . .

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