Introduction

Significant changes are taking place in the global trading system. The growing importance of regional trading arrangements is one such development, as indicated by the negotiation of the North America Free Trade Agreement, the enlargement of the European Community, and the revival of regional trading arrangements in Latin American and Africa. Another is the increased use of non-tariff measures to restrict trade, e.g., the voluntary export-restraint agreements in steel, automobiles, and machine tools, the price fixing agreement in computer chips, and the anti-dumping and countervailing duties imposed on a wide range of products, coupled with the greater difficulty of securing trade liberalization through multilateral negotiations, such as the Uruguay Round. Using the threat of closing one's own markets as a means of opening foreign markets is still another major change, as demonstrated by the more frequent use of Section 301 of the 1974 Trade Act and the inclusion of a Super 301 provision in the 1988 Trade and Competitiveness Act.

This chapter relates these changes in trade policies to significant structural changes in world industrial production that have brought about a decline in the dominant economic position of the United States, a concomitant rise to international economic prominence of the European Economic Community and Japan, and the emergence of a group of newly industrializing developing countries (NICs).