The theoretical work, however, has shed little light on how, in practice, governments can select which industries to subsidise - and which to tax in order to finance the subsidy - so that, in the end, the country’s welfare is improved. And then there is the matter of politics: once the government has agreed to support “strategic” industries, every industry will assert its strategic importance in order to share in the pie. Under real-world political pressures, the allure of strategic trade policy fades quickly.
Governments’ intervention in trade is not limited to fine calculations of strategy. There is plenty of aid to politically sensitive industries, such as agriculture. And governments often rush to obstruct “unfair” competition from abroad.
Anti-dumping duties are a case in point. In theory, these are intended to keep foreign producers from “dumping” goods abroad at less than their cost of production, by subjecting the goods to extra import duties. In practice, they are a politically neat method of protecting a particular industry. Once the favoured weapon of rich-world governments, anti-dumping duties have been been taken up eagerly by developing countries .
Despite such machinations, world trade flows more freely than it used to. This is due mainly to international agreements under which governments agree to forswear trade barriers - most notably, the General Agreement on Tariffs and Trade (GATT). All told, there have been eight rounds of gatt talks since 1947, in which countries have cut their import tariffs. Tariffs on manufactured goods are now down to around 4% in industrial countries.
The most recent gatt round, the Uruguay round, ended in 1993. The Uruguay round did much more than cut tariffs on goods. It heralded a big institutional change, creating the World Trade Organisation (WTO), which now boasts 132 members, as a successor to GATT.
It also made three big changes to the rules of world trade. First, it began the process of opening up the most heavily protected industries, agriculture and textiles.
Second, the Uruguay round vastly extended the scope of international trade rules. The rules were extended to cover services, as well as goods. New issues, such as the use of spurious technical barriers to keep out imports and the protection of foreigners’ “intellectual property”, such as patents and copyrights, were addressed for the first time.
Of these new agreements, the one in services is especially interesting. A lot of trade no longer involves putting things into a crate and sending them abroad on ships. Many services, can be traded internationally: a British construction firm can build an airport in Japan, and an American insurance company can sell its products in Germany.
Lots to talk about
The WTO EStimates that commercial-service trade was worth $1.2 trillion in 1996, around one-quarter of the value of trade in goods. The services agreement, plus a recent deal on telecommunications trade, should ease the barriers that limit such trade.
The third change wrought by the Uruguay round was the creation of a new system for settling disputes. In the past, countries could (and sometimes did) break GATT rules with impunity. Under the new system, decisions can be blocked only by a consensus of wto members. Once found guilty of breaking the rules (and after appeal) countries are supposed to mend their ways. This system so far seems to be working better than the old one, and is helping to build up the new institution’s credibility.
Despite these recent advances, there are plenty of difficulties ahead. China, the world’s second-biggest economy, and its 11th-biggest exporter, is not yet a member of the WTO, and talks on its accession have been difficult. Some countries, such as America and France, would like to see the wto address itself to the relationships between trade, labour standards and the environment. Others, notably India and Malaysia, are opposed. In 1996 the WTO’S members agreed to study the issues, but there is no agreement about whether the wto should go further.
VOCABULARY
| 1. trade flows | товарные потоки | |
| 2. imports | импортные товары (сравн. Import- импорт) | |
| 3. exports | экспортные товары (срав. export - экспорт) | |
| 4. merchandise trade | торговля товарами (в отличие от услуг) | |
| 5. total output | общий объем выпуска продукции | |
| 6. the ratio of world exports to GDP | отношение объема мирового экспорта к валовому внутреннему продукту | |
| 7. sophisticated products | высокотехнологические товары | |
| 8. sales | объем продаж | |
| 9. microeconomic | на микроэкономическом уровне | |
| 10. the real benefits of trade | реальные выгоды (преимущества), которые приносит торговля | |
| 11. domestically made goods | товары отечественного производства | |
| 12. trade deficit | дефицит торгового баланса | |
| 13. commodity | товар (главным образом сырьевые товары) | |
| 14. the principle of comparative advantage | принцип сравнительного преимущества | |
| 15. it has a bigger edge in computer making | имеет большее преимущество в производстве компьютеров | |
| 16. terms of trade | условия торговли | |
| 17. absolute advantage | абсолютное преимущество | |
| 18. skilled (unskilled) workers | квалифицированные/ неквалифицированные) рабочие | |
| 19. manufactures | готовые товары | |
| 20. natural resources | природные ресурсы | |
| 21. costs | издержки производства | |
| 22. subsidies | субсидии | |
| 23. government intervention | вмешательство государства | |
| 24. politically sensitive industries | отрасли важные с политической точки зрения | |
| 25. anti-dumping duties | анти-демпинговые пошлины | |
| 26. dumping | демпинг, продажа товаров за границей по заниженным ценам | |
| 27. cost of production | себестоимость | |
| 28. by subjecting the goods to extra import duties | облагая товары дополнительной импортной пошлиной | |
| 29. spurious technical barriers | зд. Искусственные (скрытые) технические барьеры | |
| 30. intellectual property | интеллектуальная собственность | |
| 31. patents and copyrights | патенты и авторские права | |
| 32. putting things into a crate | зд. Упаковать товары | |
| 33. commercial-service trade | торговля коммерческими услугами | |
4. Переведите отрывок «Enter the state».
5. Напишите реферат и аннотацию к данному тексту.
Text B.
1. Прочтите и переведите следующий текст:
Cast your eye over a list of the bitterest trade rows of the past few years. Many concern not the traditional tools of protection, such as tariffs, import quotas and export subsidies, but differences in domestic regulations. For example, rules supposedly intended to protect consumers from dangerous products are sometimes seen by foreigners as trade barriers. Plenty of America’s frequent spats with Japan stem from American companies’ inability to break down the ties between Japanese manufacturers, distributors and retailers; Japan’s antitrust authorities, the Americans say, are slack.
Such disputes are likely to occur more often in future. One reason is the growth of international trade: as national economies become more integrated, firms will complain more often about the rising cost of having to adapt to different rules in different markets.
More serious is the growing worry, especially in America, that countries in which the regulation of labour standards tends to be weak, and protection of the environment scanty, will have an “unfair” advantage in trade and in attracting direct inviestment. Some attribute the fall in the wages of unskilled American males, at a time when rich workers’ earnings have risen, to competition from countries with slacker regulations. Thus fear of regulatory protection on the one hand, and cheap imports on the other, is making some politicians, businessmen and labour leaders argue that more harmonisation of national standards would be a good thing.
But would it? In some respects, perhaps. In a recent book Alan Sykes, a law professor at the University of Chicago, shows how national product standards and regulations can act as trade barriers. Frequently, he argues, there is no need for governments to intervene at all. The market can be relied upon to ensure, say, that software and computers are compatible, or that goods are of sufficient quality; if they are not, consumers will not buy them. In such instances, differences in national regulations that are unnecessary in the first place are likely to hobble trade.
Where regulation can be justified - for example, in ensuring that food is safe to eat or that children’s nightclothes are not inflammable - so might differences between countries’ rules. The reason, says Mr Sykes, is that consumers’ preferences and incomes vary from one country to the next: just as the market might produce goods of lower quality in poorer countries, or with differences tailored to national tastes, so governments should respond in the same way.
Yet such diversity has costs as well as benefits: firms find it expensive to ensure that their products comply with regulations in every country in which their wares are sold. Much of the time, reckons Mr Sykes, it is impossible to decide whether international differences are justified. Sometimes, though, they clearly are not. Too often, they are designed to coddle local producers at the expense of foreigners and the local consumers they are supposed to protect. In one celebrated example, the Thai government once used an anti-smoking campaign to justify taxes and restrictions on imported cigarettes - but not on locally made ones.
A new paper by Jagdish Bhagwati, an economist at Columbia University in New York, examines the demands for reducing other forms of diversity: structural differences between economies, notably Japan’s keiretsu system of closely related companies; labour standards; and environmental rules. Not surprisingly to anyone familiar with Mr Bhagwati’s work, he finds them less than compelling.
In part, he attributes America’s attacks on the structure of the Japanese economy, and its demands for stricter labour and green laws in poorer countries, to America’s diminishing share of world output. This makes it more reluctant to play by the rules of free trade.
Green is good, but
However, Mr Bhagwati also considers several more respectable motives for wanting harmonisation. Some Americans might argue that Mexico, say, should have higher standards of environmental protection, or tougher labour laws, because they believe that Mexicans have a right to the same air quality, or wages, as Americans. Or they might believe, out of concern for humanity as a whole, that Mexicans should do their bit to protect the global environment. Either way, some advocate the threat of trade sanctions to force Mexico to mend its ways.
Mr Bhagwati says this is wrong. It is fine, he says, for lobbyists to ask their own governments to cough up for good causes. But in this instance, they are asking them to make foreigners do the coughing. That makes it likely that those who would benefit from such trade protection will try to put more demands on poorer countries. Moreover, sanctions may not lead to less pollution or better working conditions: if Mexico spends more on clean air than it can afford, or raises its labour standards, its ability to grow and improve its record later will be damaged.
A further reason for wanting less diversity is a fear of a «race to the bottom» in environmental and labour standards. Multinational companies, the argument runs, will be attracted to countries with slack rules; countries where standards are high now will have to relax them or see factories close. The result ? Miserably paid workers everywhere, and a ruined planet.
Maybe. Mr Bhagwati points out that the «bottom» is just one of several theoretically possible outcomes, and that the evidence of such a race is far from conclusive. If the American government wants to protect the environment and workers’ rights, he suggests, that rather than force poor countries to adopt higher standards, it would be better to require American firms operating abroad to adopt the same employment and environmental practices as they would at home. (Indeed, plenty already do.) If the idea is to make the planet greener and workers less poor, surely they would not object ?
VOCABULARY
| 1. harmonisation of national standards | гармонизация (выравнивание) национальных стандартов |
| 2. to hobble trade | препятствовать, мешать торговле |
| 3. wares | товары |
| 4. to coddle local produces | зд. защищать местных производителей |
| 5. diversity | зд. различия |
| 6. keiretsu system = (cross-shareholding system) | система взаимного владения акциями |
| 7. green laws | законы, регулирующие защиту окружающей среды |
2. Напишите реферат и аннотацию по данной статье.
Text C.
1. Прочтите и переведите следующий текст:
Ây the sorry standards of much of this century, world trade looks in rude health. In the 1930 S, protectionism helped poison the world economy. After the second world war, tariffs and other trade barriers fell too slowly. However, over the past decade, many of the restrictions that stifle international commerce have been relaxed - thanks in large part to the lengthy Uruguay round of GATT talks, completed in 1993. Since 1990 world trade has grown by 6% a year, compared with less than 4% a year in the 1980s. As if to confirm the importance that governments now attach to the subject, there is now a World Trade Organisation (WTO), with 126 members, to police the new regime and to take the cause of free trade further into areas where there are still far too many restrictions, such as agriculture, services and investment. However, the greatest damage to free trads will be done by what is left often unmentioned: the threat “regionalism” poses to global trade.