Structural Changes and New Protectionism

1

• Structural Changes and New Protectionism
• Several structural changes taken place since
  1960s have led to new wave of protectionism in
  spite of the efforts of GATT. Such changes
  include
• Growing interdependence among nations this
  increased the level of political sensitivity to
  trade issues
• Growing convergence among nations increased
  capital accumulation (human physical),
  technology transfer, all which alter differences
  in factor endowment
• Increased investment in research and development
  (R D) increased productivity
• Disruptions in world economic system in 1970s and
  1980s stagflation, oil shocks, unemployment.

2

• Pluralism rise of Japan and European Union in
  1970s and 1980s complicated trade management.
• The emergence of new non-tariff barriers (NTBs)
  government procurement policies, customs
  procedures, health and sanitary regulations,
  national standards, etc.
• The use of domestic policies to stimulate growth
  in certain industries subsidies, tax
  preferences, local content, financial assistance
  etc.
• Implementation of Voluntary Restraint Agreements
  (VRAs) in i980s.

3

• North-South, East-West Trade Issues and
  Development
• Economic development of Developing countries of
  the south has taken a central position in trade
  negotiation between the southern and northern
  countries
• The issue of infant industry, Import substitution
  vs. trade promotion, inelastic demand in North
  for primary products from the South, and Northern
  dominance of international market characterised
  trade relations between the North and the South.
• Southern countries have come together to form a
  common front UNCTAD (the G-77, 1964), New
  International Economic Order (NIEO-1976), ACP
  Lome Convention (I-V), ACP-EU Agreement (the
  Cotonou agreement).

4

• The East-West trade relation focuses on how to
  manage political reform in order to enhance trade
  between communist East European States and the
  Liberalist Western States. Russia, Czech,
  Hungary, Poland etc.
• East-West also covers trade relations between US
  and such States as Cuba, North Korea, Iran, Iraq,
  Syria
• The East-West relation has extended to issue of
  terrorism of recent.

5

• New Trade Issues
• Several issues have evolved from the different
  Rounds of trade negotiations, which have now
  become subject of discussion in recent WTOs
  Ministerial meetings
• The EU common agricultural policy (CAP),
  intellectual property (TRIP), trade-related
  investment measures (TRIMs), trade in services,
  reduction and elimination of NTBs, market access
  for LDCs, elimination of the Multi-Fiber
  Arrangement (MFA), Sanitary and Phytosanitary
  (SPS) issue, etc.