Book contents
- Frontmatter
- Contents
- Preface
- PART ONE INTRODUCTION
- PART TWO INTERNATIONAL TRADE THEORY AND POLICY
- 2 Comparative Advantage and the Gains from Trade
- 3 Economic Efficiency and Comparative Advantage
- 4 Factor Endowments and Comparative Advantage
- 5 Factor Substitutiton and a Modified Ricardian Model
- 6 Factor Substitution and the Heckscher–Ohlin Model
- 7 Imperfect Competition and International Trade
- 8 Trade and Factor Movements
- 9 Instruments and Uses of Trade Policy
- 10 The Evolution of Trade Policy
- 11 The Future of the Trading System
- PART THREE INTERNATIONAL MONETARY THEORY AND POLICY
- Appendix A Mathematical Notes on Trade Theory and Policy
- Appendix B Mathematical Notes on Monetary Theory and Policy
- Appendix C Outlines of Answers to Selected Problems
- List of Abbreviations
- Index
11 - The Future of the Trading System
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface
- PART ONE INTRODUCTION
- PART TWO INTERNATIONAL TRADE THEORY AND POLICY
- 2 Comparative Advantage and the Gains from Trade
- 3 Economic Efficiency and Comparative Advantage
- 4 Factor Endowments and Comparative Advantage
- 5 Factor Substitutiton and a Modified Ricardian Model
- 6 Factor Substitution and the Heckscher–Ohlin Model
- 7 Imperfect Competition and International Trade
- 8 Trade and Factor Movements
- 9 Instruments and Uses of Trade Policy
- 10 The Evolution of Trade Policy
- 11 The Future of the Trading System
- PART THREE INTERNATIONAL MONETARY THEORY AND POLICY
- Appendix A Mathematical Notes on Trade Theory and Policy
- Appendix B Mathematical Notes on Monetary Theory and Policy
- Appendix C Outlines of Answers to Selected Problems
- List of Abbreviations
- Index
Summary
INTRODUCTION
The previous chapter described the origins of the multilateral trading system created at the end of World War II and the trade liberalization that took place thereafter under the auspices of the General Agreement on Tariffs and Trade (GATT). It then traced the growth of opposition—the revival of protectionism in the United States and other countries as older industries were exposed to import competition, and the growing use of nontariff barriers, as well as antidumping and countervailing duties. It also noted that the GATT had failed to liberalize trade in farm products or deal with hidden trade barriers, such as the restrictive practices used by Japan and other countries to insulate their markets from import competition—practices that led the United States to adopt an aggressive trade policy aimed at opening foreign markets by threatening retaliation.
Other major changes in the world economy posed threats and challenges to the trading system. The globalization of manufacturing accelerated sharply in the 1980s, due partly to the rapid growth of foreign direct investment by American, European, and Japanese firms. Many developing countries, moreover, began to upgrade their exports, moving from toys, textiles, and apparel to TV sets, microchips, and cellular phones, and some of them started to export steel, machinery, and ships. The collapse of the Soviet Union added two dozen countries to the world economy, from Hungary in the West to Kazakhstan in the East, and they began to transform their domestic economies—to switch from central planning to the use of market prices—and to restructure their foreign trade.
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- Chapter
- Information
- The International Economy , pp. 238 - 272Publisher: Cambridge University PressPrint publication year: 2000