Industrial Subsidies and Friction in World Trade: Trade Policy or Trade Politics?

By Rambod Behboodi | Go to book overview

1

INTRODUCTION

In the field of trade...the spectacular decline in tariff rates has brought into view a variety of trade restriction measures that previously were masked. Unlike tariffs and quotas, many of the remaining barriers are complex and subtle, varying substantially from one country to the next and deeply intertwined in domestic policies and institutions.... Schemes to promote laggard regions ...have taken on increased importance as subtle, yet powerful, barriers to trade. So too have measures justified on the basis of health and safety.... Because many of these measures were not explicitly designed to restrict foreign trade, it is difficult to determine how restrictive they may be and even more difficult to fashion appropriate remedies. The adjudication of disputes over such measures, it is becoming evident, requires a factfinding capability and a degree of shared interest among governments not often found in global organizations.1

This study is about 'subsidies': what they mean and how they are regulated. In this chapter I will argue why, in my view, a new study on this subject needed to be undertaken.

In the past few years I have been troubled by the potential severity of the difficulties Canada faces in its international trade relations. Obstacles faced by Canadian exporters are manifold and complex. On the one hand, the breakdown of trade barriers in Europe-beginning with the Euro-6, and by the end of this year potentially encompassing 18 countries and 380 million people-has forced many European industries to become more efficient and competitive, thus making international competition more difficult for Canadian industries. On the other hand, the persistent protectionist sentiments in the United States-by far the largest market

-3-

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Industrial Subsidies and Friction in World Trade: Trade Policy or Trade Politics?
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Acknowledgements ix
  • List of Abbreviations and Specialised Terms xi
  • Part I - The Background 1
  • 1 - Introduction 3
  • 2 - Domestic Industrial Subsidies in International Trade Theory 7
  • Part II - International Institutions for the Regulation of Subsidies 45
  • Introduction 47
  • 3 - Multilateral Regulation of Subsidies 50
  • 4 - Supranational Regulation of Subsidies 81
  • 5 - Unilateral Regulation of Subsidies 97
  • Part III - The Outlook 131
  • 6 - The Uruguay Round 133
  • 7 - Conclusion 151
  • Notes 157
  • Bibliography 193
  • Index 208
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