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Not only the wealth, but also the independence and security of a country appear to be materially connected with the prosperity of manufactures. Every nation, with a view to these great objects, ought to endeavor to possess within itself all the essentials of national supply.

Alexander Hamilton, Report on Manufactures, December 5, 1791.

The paper reviews critically the arguments concerning greater voice for Developing Countries in global governance. It supports the arguments for greater voice but argues that greater voice brings with it greater responsibilities in terms of the actions and commitments from Developing Countries. The two main illustrations are the multilateral trade negotiations in the WTO and the negotiations concerning climate change in the UN. In both case, it is argued, developing countries must assume greater responsibilities if these negotiations are to be concluded. This can be done in a way which yields net benefits to the Developing Countries themselves.

This paper studies the effect of preferential trade agreements (PTAs) on multilateral trading system using a sequential bargaining game. The study considers two formats of PTAs, i.e., when the PTA tariffs are specified before the formation of PTAs and when PTA members have to negotiate PTA tariffs after the formation of PTAs. The study finds that PTAs with specified tariffs can be building blocks to multilateral liberalization while PTAs without specified tariffs are stumbling blocks. The paper also concludes that PTAs can eliminate bargaining inefficiency called forward manipulation when PTA tariffs are specified before PTA negotiation.

The WTO dispute settlement mechanism (DSM) is now facing a crisis of paralysis. Given such a challenging environment, this study examines factors affecting the participation of the WTO DSM by using bilateral data of WTO members from 1995 to 2017. Moreover, we provide a comparative analysis of the factors affecting the filing of cases at the WTO DSM between developed and developing countries across this period. By conducting the rare-event logistic regression method, we find that the export intensity, retaliation capability, economic power and economic threat are the main factors determining the initiation of trade disputes by WTO members. Moreover, the results from seemingly unrelated regressions suggest that economic power, proxied by the complainant country’s gross national income, is not a vital issue of importance that developed countries need to consider when deciding to initiate trade disputes; however, in contrast, developing countries still see it as an important factor affecting the use of DSMs, especially when the target countries are developed countries. Nonetheless, it is worth noting that in the later stage of the WTO, the impact of economic power no longer has any differential influence. On balance, these results reflect the efforts of the WTO to build a fair and rule-based DSM while also highlighting the urgent practical significance of maintaining a solid and effective mechanism for handling international trade disputes.

China’s 2002 Pharmaceutical Market.

Punjab Government Plans to Set Up Biotech Board.

Andhra and LIC Join Hands for VC Fund.

Harmful Level of Mercury in Whale Meat.

Korea to Reduce Milk Production.

New Biotech Valley in Malaysia.

Tightened Measures Against Canadian Beef and Related Products Import.

Biotechnology Taskforce Named.

New WTO's Policy to Protect Public Health Interests for Developing Countries.

Drugmakers from India Helping African AIDS Patients Comply to Therapy.

GE Acquires Amersham as Part of Strategic Expansion.

The main purpose of this paper is to examine the roles of economic and political factors in explaining the foreign ownership share of a country's banking assets. In particular, our study includes new market-openness and regulation variables. The General Agreement on Trade in Services is an important element that affects financial sector regulation of every current and potential World Trade Organization member country, and opening financial markets is an important goal of this agreement. We find that the market openness index developed by Barth et al. (2010) bears a statistically significant relation to foreign ownership, as expected, and that regulation, rule of law, and profit opportunities are also important determinants of foreign ownership of bank assets.

We show that new trade restrictions implemented since the onset of the global financial crisis have had — in the limited products targeted — a strong distortionary impact on trade. Their aggregate impact is modest, however, as most countries have resisted a widespread resort to protectionism. Looking ahead, sustained high unemployment, uneven growth, and an unwinding of government stimulus measures suggest that protectionist pressures may rise. Continuing and further enhancing monitoring of all protectionist measures will help, but the surest way to avoid such a downside scenario is to tighten multilateral trade commitments by completing the World Trade Organization (WTO) Doha Round.

In the post-crisis agenda of reform of financial regulation, macroprudential policy has been assigned a central role. Some of the measures of this agenda involve restrictions on cross-border financial flows and discriminatory restrictions targeting particular financial institutions and activities. Others target corporate form and the relations between the constituent parts of banking groups. Many of the measures implemented or proposed as part of the reform agenda may be inconsistent with the World Trade Organization (WTO) General Agreement on Trade in Services (GATS) and with other bilateral and regional agreements on trade and investment in banking services. As a result both sets of rules may eventually require revision.

The recent explosion of bilateral and regional deals, President Trump’s policy against multilateralism, and, lastly, the restrictions to international trade because of the COVID-19 pandemic have highlighted the issue of the need for a multilateral trading system, currently embodied by the World Trade Organization (WTO). Although the WTO has achieved most of its goals over the last two decades, it is undeniable that it is facing major challenges that question its relevance, effectiveness, fitness and responsiveness to contemporary issues. Is the lack of multilateralism worrisome? What will be the future of the WTO? By summarizing the past and current debate and proposing a critical reading of the WTO, this paper aims to answer these crucial questions.

Drawing on the idea that countries are eligible to implement differentiated emission reduction policies based on their respective capabilities, some parties of UNFCCC attempt to weaken the principle of “Common but differentiated responsibilities(CBDR)” and impose carbon tariff on international trade. This initiative is in fact another camouflage to burden developing countries with emission cut obligation, which has no doubt undermined the development rights of developing countries. This paper defines Carbon Tariff as border measures that target import goods with embodied carbon emission. It can be import tariffs or other domestic tax measures that adjust border tax, which includes plain import tariffs and export rebates, border tax adjustment, emission quota and permit etc. For some developed countries, carbon tariffs mean to sever trade protectionism and to build trade barriers. Its theoretical arguments like “loss of comparative advantage”, “carbon leakage decreases environmental effectiveness” and “theoretical model bases” are pseudo-propositions without international consensus. Carbon tariff has become an intensively debated issue due to its duality of climate change and trade, but neither UNFCCC nor WTO has clarified this issue or has indicated a clear statement in this regard. As a result, it allows some parties to take advantage of this loophole and escape its international climate change obligation. Carbon tariff is an issue arising from global climate governance. To promote the cooperation of global climate governance and safeguard the social and economic development of developing countries, a fair and justified climate change regime and international trade institution should be established, and the settlement of the carbon tariff issue should be addressed within these frameworks. This paper argues that the international governance of carbon tariff should in cooperation with other international agreements; however, principles and guidelines regarding this issue should be developed under the UNFCCC. Based on these principles and guidelines, WTO can develop related technical operation provisions.

Climate change has impacts on global society in different aspects, including those on the trade industry. Similarly, the trade industry contributes to global emissions of Greenhouse Gases through different technologies involved, and different rules adopted by the World Trade Organization (WTO) or related agreements. Such circulation of impacts implicates that neither climate change agreements nor the WTO can deal with climate change alone, but through international cooperation. Therefore, this study explores the status of international cooperation between the WTO and the Paris Agreement for addressing climate change in the trade industry. It also assesses different challenges faced by such cooperation, and proposes recommendations to addressing those challenges.

This paper considers the timing of issuing a compulsory license on pharmaceuticals. Apart from confirming the role of basic public health concerns--such as the virulence and prevalence of the disease to be addressed--in compulsory licensing, the paper identifies key economic variables of direct concern to a revenue-maximizing government with the power to issue the license. The paper finds that a disease that threatens to reduce domestic tax revenues is likely to be met with a move toward generic manufacturing of patented drugs. A compulsory license is less likely to be issued if retaliation by trade partners endangers the domestic export sector or if foreign trade contributes significantly to government finances. Thailand’s 2006 compulsory license issue is discussed as an example supporting the implications derived from the model.

Negotiators from developed countries pushed hard for the inclusion of the TRIPS Agreement in the WTO set of agreements because it was viewed as a potentially effective method of coercing developing countries to strengthen their protection of intellectual property rights (IPR). We investigate whether the threat of cross-agreement retaliation, which could be authorized in disputes regarding the TRIPS Agreement, is effective in changing countries’ IPR protection regimes. The results from a panel empirical model suggest that both the TRIPS Agreement and the strength of trade ties with developed countries are important determinants of IPR protection regimes, but the vulnerability to potential trade losses through cross-agreement retaliation is not a uniformly significant determinant across geo-economic regions. These results extend beyond the TRIPS Agreement and highlight the potential ineffectiveness of the WTO’s retaliation mechanism as a coercive threat.

The Agreement on Safeguards (ASG) clarified the obligation to apply measures in accordance with the most favored nation (MFN) principle. Because foreign supply shocks can be non-uniform, MFN can induce nullification and impairment (N&I) complaints at the World Trade Organization from (third party) foreign suppliers not benefitting from the shock. These suppliers’ exports are reduced by both the beneficial shock to other exporters and the safeguard (SG) action by the home country. Although the ASG made use of SG more attractive by delaying requests for retaliation for three years in the absence of compensation for N&I, this may have been negated by the MFN requirement. Thus, it becomes a plausible explanation for the proliferation of antidumping actions. For recent U.S. anti-dumping cases against multiple exporting countries, dumping margins differing by over an order of magnitude were common. This suggests that alternative use of SG with an MFN requirement would elicit third party N&I.

We use both qualitative and quantitative tools to examine whether membership in the WTO reduces the likelihood of conflict. In our qualitative analysis, we show how WTO facilitates cooperation and transparency. Then we study what policymakers say and do to use trade to promote peace. We also examine whether and how members of the WTO respond to acceding states as well as member states experiencing inter-state conflict. We find member states do little to expand trade with states in conflict. Moreover, they continue to use trade sanctions. Hence, they are sending contradictory messages about the trade/peace relationship. Next we test whether the trust engendered through daily interactions and participation in a rules based system (our membership hypothesis) reduces the likelihood of conflict or whether membership in the WTO which in turn leads to expanded trade reduces the likelihood of conflict (our membership and trade hypothesis). We find no evidence that membership alone reduces the likelihood of either major interstate war or militarized interstate dispute among members. However, when states are both members of the GATT/WTO and benefit from increased trade, they are less likely to engage in militarized interstate disputes. Hence, the liberal illusion is not a complete delusion.

This study employs four-dimensional (firm-product-destination-year) export data of Brazilian firms to analyze firm-level responses when faced with an antidumping protection in a particular export market. We examine the extent to which firms shift their exports to other destinations in response to the antidumping duties. Our findings suggest that trade deflection depends on past export status in export markets. Firms deflect trade but only to destinations where they already have an established trading relationship. This prior relationship is important both for the intensive as well as for the extensive margin of trade alternative destinations. In addition to making sense of existing puzzles in trade deflection, this paper makes an important contribution by demonstrating how much the fixed costs of developing an export destination matter in terms of trade deflection.

This paper evaluates the impact of China's WTO entry and the establishment of a free-trade agreement between China and ASEAN on the ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore and Thailand). We examine the trade competition between the two regions using a market-share model and assess the impact of China's WTO entry on the ASEAN-5 with an exchange rate-tariff model, based on two-digit SITC data. It is found that for the period 1987 to 2000 the competition in trade only occurred between China and Singapore in manufacturing goods, while the competition between China and other four nations was in primary goods. The trade-widening opportunity between the two regions appears much larger than the competitive challenges for ASEAN-5 after the WTO entry of China and the establishment of FTA between ASEAN and China, impacts on different industries are evaluated.

The aim of this paper is to present some aspects related to the Multilateral Trade Regulations and transnational and national environmental programs, from the point of view of their implications for foreign trade in environmental products. It should be noted that the elimination of trade barriers increases the efficiency of the world economic system by enabling countries to specialize in those sectors in which they possess economic advantages, which includes those sectors in which they possess favorable natural environmental conditions. In the latter half of the 1990’s one could observe a rapid and dynamic increase in the environmental protection industry’s share in the world economy. The overall global value of production in the environmental protection industry was estimated at 550 billion USD in the year 2001. In relative terms, this environmental market is not as large as the steel or agriculture markets, but roughly the same size as the pharmaceuticals and information technology markets.

The environmental policy in the “old” and also “new” EU countries contributes to the achievement of the main goals of the global sustainable development strategy via the development of cleaner production and by the support for foreign trade in environmental friendly goods. The results of the empirical foreign trade analysis of trade in environmental products which are presented in the paper cover 11 countries of the OECD, including the USA, seven “old” EU member states, and one “new” member state - Poland . It is based on an international comparable database for environmental friendly goods, calculated by the author according to the OECD requirements (OECD-EUROSTAT, WTO, 1999). The analysis enables the author to present some important trends in foreign trade affecting the main exporters and importers of environmental goods in the USA and the EU. The analysis is also related to some regulations issued by the Committee for Trade and Environment of the WTO, with special reference to the conclusions of the Fourth and Fifth Ministerial Conferences in Doha and Cancun. The paper will also examine the effects of environmental measures on market access within the multilateral liberalization process.

Agriculture is an urgent and vital problem for developing countries, and even more so for the poorest countries that are often dependent on a very small set of commodities, many of which are highly subsidized and protected in the OECD countries. The Uruguay Round brought agriculture into the WTO legal framework, but did not lower the effective level of OECD farm protection after 1995 and granted many exceptions to WTO rules that reinforced agricultural protection. While there are a number of diverging forces that are potential sources of change in the levels and patterns of agricultural protection, the recent farm policies adopted by the U.S. and EU reflect an absence of significant domestic reform and appear to be going in the wrong direction.

The analysis of agricultural liberalization reveals very large potential gains for both developed and developing countries that will come especially from own-country liberalization as well as from inter-country trade, significant benefits that may be realized by the poorest developing countries, and limited benefits from existing preferential agricultural arrangements. An ideal program for agricultural liberalization in the Doha Round would involve substantial reductions in the high tariffs that exist in both developed and developing countries using the Swiss formula approach and limiting exceptions and special and differential treatment, elimination of agricultural export subsidies, and making meaningful reductions in domestic supports. The negotiations should not get hung up on issues of food security and the effects of higher prices for low-income consumers, and a special safeguard for agriculture is not recommended. It is imperative that agricultural liberalization should be combined with appropriate domestic policies and actions and international assistance, if needed, to help finance emergency food inventories and aid to disadvantaged groups.

Patrick A. Messerlin is Professor of Economics at the Institut d'Etudes Politiques de Paris (Sciences Po) and director of the Groupe d'Economie Mondiale de Sciences Po (GEM) which is an independent research center seeking to improve the performance of French and European public policies in a global world. In 2002-2005, he was co-chairman with Dr Ernesto Zedillo, Former President of Mexico, Director of the Yale Center for the Study on Globalization, of the Task Force on Trade in the UN Millenium Development Goals Project, which produced a Report on Trade for Development released in May 2005. In 2001-2002, he was special advisor to Mike Moore, WTO Director General. He has published a dozen books and a hundred papers on trade theory and policy. His most recent book is Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s, Institute for International Economics (Washington) 2001.