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A rock and a hard place : the two faces of U.S. trade policy toward Korea (English)

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  • A rock and a hard place : the two faces of U.S. trade policy toward Korea (English)
  • Finger, J. Michael; DEC
  • World Bank (WB)


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Title A rock and a hard place : the two faces of U.S. trade policy toward Korea (English)
Similar Titles
Material Type Reports
Author(English)

Finger, J. Michael; DEC

Publisher

World Bank (WB)

Date 1994
Language English
File Type Link
Subject Economy < Trade

Abstract

U.S. trade policy since the 1980s has been quite different from trade policy in the first two or three decades after World War II. Until the 1970s, U.S. trade policy was dominated by systematic concerns. Trade policy actions were subject to the disciplines of constructing an open, stable, and nondiscriminatory system. In contrast, for the past 10 or 15 years the main objective of trade policy actions has been to respond to the demands of various domestic constituents for greater access to foreign markets or for reduced foreign access to the U.S. market. When systemic concerns were strong, they helped discipline the actions the U.S. government would take to advance the interest of a particular constituent. But now, these constituent-supporting actions are U.S. trade policy. To state the same point another way, the current objective of U.S. trade "policy" is to respond to each constituent's plea for the application of this or that regulatory instrument (antidumping, "301," and so on) - to respond in a way that will win that constituent's vote. "Policy" is now no more than a generic label for the accumulation of these responses. The author describes the accumulation of these responses. He tabulates U.S. trade actions in the 1980s, paying particular attention to actions against Korea. While Korean economic interests were advanced by restrictions on Korea's and other countries' exports of steel to the United States and the European Union (EU), the outcome, judged globally, was probably negative. Rent transfers to Korean and other exporters are, on a global basis, transfers from U.S. and EU users, and hence net to zero. That leaves only the efficiency effects, which is estimated to add up to a global loss of about $36 million a year, based on process and the size of the industry in 1984. The underlying theme, says the author, is that these actions have no unifying discipline except to respond in a politically acceptable way to constituent pressures. These are responses to the politics and economics of specific situations, not the automatic or hands-off extension of nondiscriminatory standards that the still-popular rhetoric of a "rules-based" system would suggest.