International Trade – WTO Law The Regulation of Trade Early thinking on foreign trade - Ancient Greek and Roman writers – foreign trade exposes citizens to the bad manners and corrupt morals of barbarians;
- Plato – gains from specialization or division of labour;
- Plutarch – “God created the sea, geographic separation and diversity in endowments in order to promote interactions through trade” (first several centuries AD);
Mercantilism - 17-18th century school of thought in Britain and Europe
- Argued for government regulation of international trade for two reasons:
- To maintain a favourable balance of trade – aggressive export but restrictive import policies;
- To promote the processing or manufacturing of raw materials at home – argument for export taxes on exported raw materials and import duties on imported manufactured or luxury goods.
- Adam Smith, The Wealth of Nations (1776) – theory of absolute advantage
- David Ricard, The Principles of Political Economy (1817) – theory of comparative advantage
- Heckscher and Ohlin (1920) – factor proportions hypothesis
- Raymon Vernon (late 1960s, Harvard) – product cycle theory
The Formation and Evolution of the GATT - Following the end of WWII, the IMF and World Bank were duly created;
- 1947 Havana Charter, i.e. the General Agreement on Tariffs and Trade (GATT) was adopted by 23 major trading countries;
- To date under the GATT, some eight negotiating rounds have now been successfully concluded, last round – the Uruguay Round – involving more than 100 countries, ending in December 1993.
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