Abstract
BY THE mid-1980s, after more than a decade of slow growth in the world economy, governments of the major trading countries were generally agreed that what is required to help promote a sustained, which is to say a non-inflationary, recovery in economic activity and to help overcome the debt crisis in the Third World is a concerted effort to counter protectionist trends by setting about the further liberalization of international trade. It was widely acknowledged, too, that a concerted effort is required to repair the international trading system whose norms, rules and procedures are laid down in the General Agreement on Tariffs and Trade (GATT). But all that is easier said than done.
‘The postwar design for international trade policy was animated by a single-minded concern to avoid repeating the disastrous errors of the 1920s and 1930s. Judgment as to the conduct of economic relations during the interwar period was uniformly harsh. It had been a colossal failure.
‘The problem had not been at the level of general theory. Official pronouncements during the period generally conformed to the dictates of liberal trade principles. Despite the pronouncements, however, trade restrictions began rising to unprecedented levels. International conferences were called with increasing frequency to do something about the deteriorating trade conditions, but the main value of their exhortations seems to have been to provide an official record of the progressive decline. By 1932 the Lausanne Conference was calling simply but meaningfully for a further conference to “facilitate the revival of international trade”’
— Robert E. Hudec, The GATT Legal System and World Trade Diplomacy (1975)
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Notes and References
Since the end of 1985, Hong Kong and Mexico have become contracting parties, increasing the GATT’s membership to 92.
OECD Press Release, OECD Secretariat, Paris, No. A(83)25, 10 May 1983, para 3. The membership of the OECD is composed of 24 of the developed, or more developed, countries.
The words used in the declaration issued by the heads of government of Canada, France, the Federal Republic of Germany, Italy, Japan, the United Kingdom and the United States of America in Williamsburg, Virginia, in the United States on 30 May 1983.
‘International Trade in 1985 and Current Prospects’, GATT Press Release, GATT Secretariat, Geneva, 21 March 1986, p. 2.
On the economic performance of Western Europe, see Juergen B. Donges, ‘Chronic Unemployment in Western Europe Forever?’, The World Economy, London, December 1985;
Assar Lindbeck, ‘What is Wrong with the West European Economies?’, The World Economy, June 1985;
and Brendan Walsh, ‘Employment and Competitiveness in the European Community’, The World Economy, March 1984.
By 1972, following the implementation in full of the Kennedy Round agreement, the average level of tariffs on manufactured and semi-manufactured products, weighted by trade between developed countries, was down to 8.3 per cent for the United States, 8.4 per cent for the European Community (of Six), 10.2 per cent for the United Kingdom (ignoring Commonwealth preferences) and 10.9 per cent for Japan. Quoted in Hugh Corbet and Harry G. Johnson, ‘Optional Negotiating Techniques on Industrial Tariffs’, in Frank McFadzean et al., Towards an Open World Economy (London: Macmillan, for the Trade Policy Research Centre, 1972) p. 57.
See Martin Wolf, ‘Sustained Economic Growth: Prospect or Mirage?’, The World Economy, September 1984, pp. 313–31.
The issues are discussed in Richard Blackhurst and Jan Tumlir, Trade Relations under Flexible Exchange Rates, GATT Studies in International Trade No. 8 (Geneva: GATT Secretariat, 1980).
For a rigorous analysis on this point, see Roland Vaubel, ‘Coordination or Competition among National Macro-economic Policies?’, in Fritz Machlup, Gerhard Fels and Hubertus Müller-Groeling (eds), Reflections on a Troubled World Economy: Essays in Honour of Herbert Giersch (London: Macmillan, for the Trade Policy Research Centre, 1983).
On what used to be called the ‘locomotive’ theory of macroeconomic policy coordination, see W.M. Corden, ‘Expansion of the World Economy and the Duties of Surplus Countries’, The World Economy, January 1978, pp. 121–34,
These arguments are developed in World Development Report 1984 (New York and Oxford: Oxford University Press, for the World Bank, 1984) Part I. Also see Deepak Lal and Wolf (eds), Stagflation, Savings and the State: Perspectives on the Global Economy (New York and Oxford: Oxford University Press, for the World Bank, 1986).
Data on the developing countries are from World Economic Outlook, Occasional Paper No. 32 (Washington: International Monetary Fund, 1984).
Data on the United States are from OECD Economic Outlook, OECD Secretariat, Paris, various issues.
President Reagan’s State of the Union Message to the United States Congress, Washington, 7 February 1985.
‘Preparatory Committee Established for New Trade Round’, GATT Press Release, 29 November 1985.
For an overview, see Protectionism and Structural Adjustment, Document TD/B/1081, in two parts (Geneva: UNCTAD Secretariat, 1986).
For a brief discussion of the situation in the early 1980s compared with the early 1930s, see Corbet, ‘Voluntary Export Restraints in the Context of a New GATT Round’, The Jama Forum, Tokyo, Washington and Paris, No. 1, Vol. 4, 1985.
The article draws on Gustav Cassel, The Downfall of the Gold Standard (Oxford: Clarendon Press, 1936).
In this connection, see Donges, loc. cit.
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© 1987 United Nations
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Viravan, A. et al. (1987). Economic Recovery: Hope or Opportunity?. In: Trade Routes to Sustained Economic Growth. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18860-4_1
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