Select Page

(c) deter circumvention of the laws, regulations and procedures of contracting parties or international agreements relating to the trade in textile or clothing products. In accordance with Article XXI, specific obligations may be amended subject to certain procedures. Countries likely to be affected by such changes may invite the changing member to negotiate compensatory adjustments; these must be conceded on the basis of the MFN. While measuring the impact of tariffs is more accurate than measuring non-tariff barriers or services, it is not as simple as it sounds. For example, economists often use a weighted duty taking into account the share of imports that fall into this line. One of the problems with this approach is that a very high tariff will totally block imports, leading to the erroneous conclusion that this customs line has no weight. This authority provides for the possibility of imposing effective sanctions that may include monetary penalties, termination actions (provisional or final), or modification, suspension and withdrawal of licences or other authorizations. 1. A contracting party applying a safeguard measure presents to the other party, after consultation with the other party, mutually agreed trade compensations in the form of concessions that essentially correspond to equivalent commercial effects or the value of the additional rights arising from the measure. The contracting party offers the possibility of such consultations no later than thirty days after the application of the safeguard measure.

10. Neither party can require trademark registration in order to determine the validity of the licence, to enforce trademark rights or for other purposes.8 Non-traditional measures to impede trade are more difficult to quantify and assess, but they are becoming increasingly important with traditional tariff protection and barriers such as the reduction of import quotas. Anti-dumping measures are increasing in both developed and developing countries, but they are disproportionately confronted by developing countries. Another major obstacle is the rules that require imports to comply with technical and hygienic standards. They entail costs for exporters that may outweigh the benefits to consumers. The European Union regulations on aflotoxins, for example, cost Africa $1.3 billion in exports of cereals, dried fruit and nuts per European life saved9 Is there a right balance between costs and benefits? Faced with problems with business models, some economists reject their usefulness. For example, Bhagwati says: “I look at a lot of estimates of trade expansion and profits – which are produced at a high cost by squeaking numbers in institutions like the World Bank using gigantic and predictable models… so little more than imaginary flights in sophisticated flying machines. [17] Many economists would consider this criticism to be extreme, but business models must nevertheless be viewed with great caution. Then Adam Smith challenged this dominant thought in The Wealth of Nations, published in 1776.

[2] Smith argued that if one nation is more efficient than another country in manufacturing a product, while the other nation is more efficient in manufacturing another product, then both nations could benefit from trade.