MFN status and the choice of tariff regime

The gradualist approach to trade liberalization views the uniform tariffs implied by MFN status as an important step on the path to free trade. We investigate whether a regime of uniform tariffs will be preferable to discriminatory tariffs when countries engage in non-cooperative interaction in multilateral trade. The analysis includes product differentiation and asymmetric costs. We show that with the cost asymmetry the countries will disagree on the choice of tariff regime. When the choice of import tariffs and export subsidies is made sequentially the uniform tariff regime may not be sustainable, because of an incentive to deviate to a discriminatory regime. Hence, an international body is needed to ensure compliance with tariff agreement.

Reworking the NAFTA: departures from traditional frameworks

This paper reviews the treatment of intellectual property rights in the North American Free Trade Agreement (NAFTA) and considers the welfare-theoretic bases for innovation transfer between member and nonmember states. Specifically, we consider the effects of new technology development from within the union and question whether it is efficient (in a welfare sense) to transfer that new technology to nonmember states. When the new technology contains stochastic components, the important issue of information exchange arises and we consider this question in a simple oligopoly model with Bayesian updating. In this context, it is natural to ask the optimal price at which such information should be transferred. Some simple, natural conjugate examples are used to motivate the key parameters upon which the answer is dependent

If the British left: agricultural policy outside the CAP?

If the Conservative party wins Britain’s General Election in 2015 the incoming Government intends to negotiate a new settlement with the EU, and then hold an in-out referendum. Opinion polls suggest a narrow majority would vote to leave. To exercise an informed choice the electorate would need to know what feasible alternatives are available, so that these can be assessed and debated. Furthermore, in the event of a no vote the Government must be ready to implement its alternative strategy: Plan B. This implies that both a new EU settlement, and Plan B, need to be negotiated concurrently. There has been no serious attempt to explain what Plan B would mean for UK farm policy. Would, for example, British farmers continue to receive the level of support that they currently enjoy; would support be more focussed on environmental objectives? WTO rules on most-favoured-nation treatment and regional trade agreements would apply. Could a WTO compatible agri-food trade agreement be negotiated with its former EU partners, or would Irish and Brazilian beef face the same tariff barriers on imports into the British market? For the EU, the loss of a major net contributor to EU finances could result in a re-examination of the CAP budget.

From harmonisation to better, smart and fit food law

As the European Union (EU) approaches its 60th anniversary, it is worth assessing progress towards a key objective – the abolition of barriers to the marketing of food in the EU. Food has always created particular problems for the EU as national differences in diets, culture and geography make standardisation impossible. Early attempts focussed on direct measures to harmonise requirements or, later, to create an ‘internal market’. Subsequently a changed emphasis brought about the need to focus more clearly on the harmonisation of food safety. More widely, the recent recognition that too much legislation can itself create barriers has led legislators to attempt to consider more carefully the impact of their efforts. This paper reflects on the various stages in the creation of harmonised food controls and considers how case law has impacted the process. Today there are still differences and complete barrier-free trade seems some way off.

Echoes of 1992: the NAFTA negotiations and North America now

Two decades ago, Canada, Mexico, and the United States created a continental economy. The road to integration from the signing of the North American Free Trade Agreement has not been a smooth one. Along the way, Mexico lived through a currency crisis, a democratic transition, and the rising challenge of Asian manufacturing. Canada stayed united despite surging Quebecois nationalism during the 1990s; since then, it has seen dramatic economic changes with the explosion of hydrocarbon production and a much stronger currency. The United States saw a stock-market bust, the shock of 9/11, and the near-collapse of its financial system. All of these events have transformed the relationships that emerged after NAFTA entered into force in 1994. Given the tremendous changes, one might be skeptical that the circumstances and details of the negotiation and ratification of NAFTA hold lessons for the future of North America. However, the road to NAFTA had its own difficulties, and many of the issues involved in the negotiations underpin today's challenges. NAFTA was conceived at a time of profound change in the international system. When Mexican leaders surveyed the world two decades ago, they saw emerging regional groupings in Europe, Asia, and South America. Faced with a lack of interest or compatibility, they instead doubled down on North America. How did Mexican leaders reconsider their national interests and redefine Mexico's role in the world in light of those transformations? Unpublished Mexican documents from SECOFI, the secretariate most involved in negotiating NAFTA, help illustrate Mexican thinking about its interests and role at that time. Combining those insights with analysis of newly available evidence from U.S. presidential archives, this paper sheds light on the negotiations that concluded two decades ago.