Securing access to international markets

Abstract

The unconditional extension of the fruits of trade negotiations under the General Agreement on Tariffs and Trade (GATT) is giving way to bilateral and other discriminatory trade agreements. Led by the United States, GATT has taken a strong position against discrimination: the benefits of negotiations under GATT generally have been extended to all contracting parties without specific conditions or reservations. This unconditional extension of benefits - the unconditional most favored nation principle (MFN) - is now under considerable pressure. This paper finds that the threat to multilateralism and small traders will be reduced if : (i) new trade liberalizing"clubs"that are formed in the Uruguay Round, or elsewhere, are open to new members on the same terms that apply to the founders; (ii) compliance with the rules of such clubs is determined multilaterally and not unilaterally by any existing members; (iii) markets that are levered open are opened in a nondiscriminatory manner; (iv) preferential trading agreements conform to the relevant GATT rule - Article XXIV and; (v) the main safeguard provision of GATT (Article XIX) remains nondiscriminatory.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade Policy,Economic Theory&Research,Trade and Regional Integration,Environmental Economics&Policies