Issues of Manufactures Liberalization and Administered Protection in the Doha Round

This article focuses especially on the positions that the developing countries should take in their own interests on the issues of manufactures liberalization and administered protection. A series of recommendations are set forth with supporting argument: (1-2) for market access, both developed and developing countries should commit to reducing their most restrictive trade barriers, using a formula approach with limited exceptions; (3) negotiated tariff reductions should be phased in over a period of ten years in equal incremental installments; (4) adjustment assistance should be provided by a system of wage insurance and subsidized by transfers from developed countries; (5) the rules for safeguards, countervailing duties, and anti-dumping should be redrafted to focus their use on cases of legitimate economic justification and to discourage their use as protectionist devices; (6) the U.S. and EU should devise and implement a program of comprehensive but declining import restrictions on imports from China consistent with China’s terms of WTO accession and eliminated by 2008; (7) WTO rules governing Preferential Trading Arrangements should be revised to insure that they contribute to the liberalization and simplification of the multilateral trading system; (8) preference granting countries should provide assistance to countries experiencing the erosion of preferences due to multilateral liberalization; (9) the WTO system of dispute resolution should remain in place; and (10) special and differential assistance, if granted, should not exempt countries from the provisions for their own market liberalization. Developing countries should participate actively and constructively in the negotiations to further their own interests. Developing countries may be at a disadvantage in the negotiating process, due to their resource limitations and inexperience in negotiations. Offsetting such disadvantages, however, are their large numbers and the compelling case for meeting their needs. What is needed is leadership and cooperation as for example with the Group of 20 and other coalitions together with a willingness to listen and be flexible on the part of their developed country counterparts. Alan V. Deardorff is John W. Sweetland Professor of International Economics and Professor of Economics and Public Policy at the University of Michigan. He received his Ph.D. in economics from Cornell University in 1971 and, since 1970, has been on the faculty at the University of Michigan where he served as Chair of the Economics Department from 1991 to 1995. He is co-author, with Robert M. Stern, of The Michigan Model of World Production and Trade and Computational Analysis of Global Trading Arrangements and has published numerous articles on aspects of international trade theory and policy. His work on international trade theory has dealt primarily with theories of the patterns and effects of trade. With Professor Stern and with Professor Drusilla K. Brown he has developed a series of computable general equilibrium models of world production, trade, and employment that have been used to analyze the effects of both multilateral and regional initiatives for trade liberalization. Deardorff's current research interests include: the causes and effects of international fragmentation, the economic effects of free trade areas, and the role of trade costs in determining patterns of international specialization and trade. Robert M. Stern is Professor of Economics and Public Policy (Emeritus) in the Department of Economics and Gerald R. Ford School of Public Policy at the University of Michigan, Ann Arbor.