Unit 8 - Background & Issues

Unit 8 focuses chiefly on non-tariff barriers (NTB), playing on the idea that in the modern setting the chief practical restraints on international trade are not high tariffs, but rather impediments presented by administrative measures (imposing additional costs and delays), regulations requiring local testing and licensing (which could but are often not addressed by recognizing foreign certifications, etc.), differing product standards (DIN or TUV or other localized standards vs UL being incorporated via regulation, etc.).  The understanding in 1947 with the original GATT was that the chief impediment to increasing international trade was overly high “tariff walls.”  More recently, however, people note that we have increasingly phased out or lowered tariffs substantially, notwithstanding which expected trade between the countries in question may still not have increased substantially.

First, we shall look at the traditional problem of quotas (GATT/WTO Art XI, which obligates GATT/WTO members to both disfavor quotas and to engage in tariffication, or the process of converting quotas and similar measures into tariffs, traditionally to allow comparability).

Second, we shall look at the regulatory transparency and government conduct provisions of GATT/WTO Article X, that commonly play a prominent role in WTO accession negotiations.  If you read Article X closely, you will see that it mandates how a WTO member government organizes and conducts itself, at least in terms of its laws, regulations, administrative and judicial decisions as they affect trade (on the theory that foreigners must have fair access to a government’s actual rules and policies for them to trade).

Last but not least, we shall look generally at the Non-Tariff Barrier (NTB) Agreement (and the Sardines Dispute) as addressing the concept of product standards, which can be manipulated as witnessed in the Sardines Dispute.