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The Threats to the World Trading System

Bhagwati, Jagdish N.

Considers here the prospects for the GATT-focused multilateral trading system, the perils it faces and the promise it nonetheless holds. The threats faced at present by the GATT arise from a variety of factors, including changes in the world economy. Recalling the preamble to the GATT, and mindful of its central articles, the following may justifiably be cited as the main principles of the GATT: "fix-rule" trading regime is to be preferred to a "fix-quantity" one; multilateralism, where these trade rules extend without discrimination to all members of the trading regime, is generally to be preferred to discriminatory arrangements; markets are to be opened through conventional reduction in trade barriers, and new disciplines are to be established, by resort to mutuality and balance of concessions; the adjudication of dispute must be impartial, pitting the strong against the weak in equal contest. The serious challenges to these GATT principles of multilateralism that have recently arisen from several directions and taken the form of an advocacy of managed trade, aggressive unilaterialism and regionalism.

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World Economy

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Economics
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January 28, 2013