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Chapter 21: Q 49. (page 523)

Why do you think that the GATT rounds and,

more recently, WTO negotiations have become longer and more difficult to resolve?

Short Answer

Expert verified

This is because of the nature of both WTO and GATT.

Step by step solution

01

Step 1. Definition

GATT was a legal accord reducing barriers to international trade by reducing quotas, tariffs, subsidies. It intends to boost economic recovery.

WTO negotiations is a forum for various governments to arrange trade agreements and to settle or solve trade disputes.

02

Step 2. Explanation

First, we talk about GATTs. They are generally prohibiting the practice of quantitative limitation on imports and exports. It is a short-term consensus by the contracting parties.it has no legal enforcement potential. GATT has no reference to solving trade disputes.

On the other hand, WTO is a fixed agreement by contracting parties. With goods, WTO also includes services and solving trade disputes.

In both GATT and WTO negotiations have become hard to resolve because of their diminishing marginal returns. So if from the set of given rules if obvious policies have been already executed then it will become very difficult to resolve other remaining disputes.

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Most popular questions from this chapter

The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 21.6 and Table 21.7.

a. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?

b. What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell?

c. Sketch two supply and demand diagrams, one for each country, in the situation before trade.

d. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade.

e. If the Land of Submarines imposes an antidumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country.

f. Does your general answer change if the Land of Submarines imposes an import quota of 70?

Name and define three policy tools for enacting

protectionism.

How do trade barriers affect the average income level in an economy?

You have just been put in charge of trade policy for Malawi. Coffee is a recent crop that is growing well and the Malawian export market is developing. As such, Malawi coffee is an infant industry. Malawi coffee producers come to you and ask for tariff protection from cheap Tanzanian coffee. What sorts of policies will you enact? Explain.

How is international trade, taken as a whole, likely

to affect the average level of wages?
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