NDLI: The most-favored nation rule in principle and practice: Discrimination in the GATT

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The most-favored nation rule in principle and practice: Discrimination in the GATT

Content Provider	Springer Nature Link
Author	Gowa, Joanne Hicks, Raymond
Copyright Year	2011
Abstract	The conflicts of interest that prevailed between the great powers in the wake of the First World War eviscerated their ability to respond collectively to the advent of the Great Depression. Instead, each turned to discriminatory trade barriers and trade blocs to try to revive domestic output. Persuaded that trade discrimination exacerbated the political tensions that erupted in World War II, policy makers constructed a postwar economic order that institutionalized nondiscrimination. Thus, Article 1 of the charter of the General Agreement on Tariffs and Trade (GATT) mandates most-favored nation (MFN) treatment. We argue here that the MFN clause itself encouraged the adoption of practices and policies that actually recreated discrimination. In particular, we argue, developing countries, long regarded as victims of discrimination, institutionalized it in their negotiations with each other. We examine two developing country PTAs that included about 80 percent of all developing-country GATT members by output (the Global System of Trade Preferences and the Protocol Relating to Trade Negotiations). We show that as in the GATT writ large, their patterns of tariff cuts and trade expansion were highly skewed toward a small number of their largest members. In trying to avoid discrimination, policy makers actually encouraged its de facto adoption.
Starting Page	247
Ending Page	266
Page Count	20
File Format	PDF
ISSN	15597431
Journal	The Review of International Organizations
Volume Number	7
Issue Number	3
e-ISSN	1559744X
Language	English
Publisher	Springer US
Publisher Date	2012-01-10
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	GATT PTAs Developing countries Most favored nation Principal supplier Economics general Political Science Social Sciences
Content Type	Text
Resource Type	Article
Subject	Political Science and International Relations Economics and Econometrics Organizational Behavior and Human Resource Management

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