Foreword xi 
l' 
A Tribute to J. Michael Finger xiii Acknowledgments xix Contributors xxi 
Abbreviations xxiii 
Introduction xxvii 
Part 1 Trade Policy Reform in Context 1 
1 Trade PoIicy Reform as Institutional Reform 3 
Dani Rodrik 
2 Economywide Dimensions of Trade PoIicy and Reform 11 Kym Anderson 
3 Exchange Rate Overvaluation and Trade Protection 17 Howard]. Shatz and David G. Tarr 
4 Fiscal Dimensions of Trade Liberalization 24 Liam Ebrill, ]anet Stotsky, and Reint Gropp 
5 Trade PoIicies for Poverty AlIeviation 28 L. Alan Winters 
Part 11 The World Trade Organization 39 
6 The WTO: Functions and Basic PrincipIes 4J BernardHoekman 
7 Reciprocity in the WTO 50 
f Michael Finger and L. Alan Winters . 8 WTO Accession 61 
Constantine Michalopoulos 
9 DeveIoping Countries and the WTO .Dispute Settlement System 71 Valentina Delich 
10 The Adequacy ofWTO Dispute Settlement Remedies: A DeveIoping Country Perspective 81 Róbert E. Hudec 
Part 111 Selected Trade Policies Affecting Merchandise Trade 93 
11 Market Access Issues and the WTO: An Overview 97 Sam Laird 
12 Tariff Peaks and Preferences 105 Marcelo Olarreaga and Francis Ng 
13 Rules of Origin and Trade Preferences 114 ~~:' 
Luis Jorge Garay S. and Rafael Cornejo 
14 Nonpreferential Rules of Origin and the WTO Harmonization Program 122 
Stefano Inama 
15 Customs Valuation and Customs Reform 128 
Vinod Rege 
16 Trade Facilitation: Improving the Invisible Infrastructure 139 
Brian Rankin Staples 
17 Industrial Policy and Developing Countries 149 
Mari Pangestu 
18 Export Development Policies and Institutions 160 
Philip English and Luc De Wulf 
19 Trade-Related Investment Measures 171 
Bijit Bora 
20 Local Content Policies: Australia's Experience with Automobiles 179 
Garry Pursell 
21 Implementing the Agreement on Textiles and Clothing 186 
Hanaa Kheir-EI-Din 
22 Safeguards: Making Sense of GATT/WTO Provisions Allowing for Import Restrictions 195 
J. Michael Finger 
23 Dealing with U.S. Trade Laws: Before, During, and After 206 
.Gary N. Horlick and Eleanor Shea 
Part IV Developlng Countries and Negotiations on Trade In Services 213 
24 Liberalization of Trade in Services in Developing Countries 221 
James Hodge 
25 The Magnitude ofFlows ofGlobal Trade in Services 235 
A. Maurer and p. Chauvet 
26 Quantifying Barriers to Trade in Services 247 
Robert M. Stern 
27 The GATS: Key Features and Sectors 259 
Rudolf Adlung, Antonia Carzeniga, Bernard Hoekman, Masamichi Kono, Aaditya Mattoo, and Lee Tuthill 
28 Negotiating Improved Market Access Commitments 280 
Aaditya Mattoo 
29 Domestic Regulations and Liberalization of Trade in Services 290 
Garla Gamberale and Aaditya Mattoo 
30 Movement of Natural Persons and the GATS Major Trade Policy Impediments 304 
Rupa Chanda 
31 Electronic Commerce, the WTO, and Developing Countries 315 
Catherine L. Mann 
32 Completing the GATS Framework: Safeguards, Subsidies, and Government Procurement 326 
Pierre Sauvé 
33 Regional Liberalization of Trade in Services: Experiences in the Americas 336 
Sherry M. Stephenson and Francisco Javier Prieto 
Part V Technology and Intellectual Property 347 
34 International Technology Transfer and Economic Development 351 
Kamal Saggi 
Contents 
35 Implementing the TRIPS Agreement 359 Jayashree Watal 
36 Benefiting from Intellectual Property Protection 369 Keith E. Maskus 
37 Proprietary Protection of Genetic Resources and Traditional Knowledge 382 Arvind Subramanian 
38 Cultural Industries and Intellectual Property Rights 390 Frank J. Penna and Coenraad J. Visser 
39 Trademarks, Geographical Indications, and Developing Countries 403 Carsten Fink and Beata K. Smarzynska 
Part VI "Behind-the-Border" and Regulatory Issues 413 
40 Multilateral Disciplines and Government Procurement 417 Simon J. Evenett 
41 Standards, Regulation, and Trade: wro Rules and Developing Country Concerns 428 John S. Wilson 
42 Multilateral Disciplines and National Investment Policies 439 Bernard Hoekman and Kamal Saggi 
43 Trade, Competition, and the wro 447 Peter Holmes 
44 Merger and Anticartel Policies in an Era of Integrating Markets 456 Simon J. Evenett 
45 Trade and Labor: Text, Institutions, and Context 463 Simon Tay 
46 Environmental Regulation and fue wro 472 Veena Jha 
Part VII The Trading System and Developing Countries 483 
47 Developing Countries: Turning Participation into Influence 485 Diana Tussie and Miguel F. Lengyel 
48 Implementation ofwrO Commitments: The Development Challenge 493 J. Michael Finger and Philip Schuler 
49 Special and Differential Treatment 504 1: Ademola Oyejide 
50 Trade- Related Capacity Building forEnhanced African Participation in the Global Economy 509 David F. Luke 
Part VIII Trade Policy Questions and Guidelines 517 
51 Rules ofThumb for Trade Policy 519 
Constantine Michalopoulos, Maurice Schiff, and David G. Tarr 52 Arguments for and against Uniform Tariffs 526 David G. Tarr 
53 Formula Approaches to Reciprocal TariffLiberalization 535 Arvind Panagariya 
54 Binding Tariffs: Why Do It? 540 Joseph F. Francois and Will Martin 
55 Benefiting from Regional Integration 548 Bernard Hoekman and Maurice Schiff 
Appendixes 559 
A Patterns of Trade and Protection: Selected Country Data 561 FrancisNg 
B Trade Indicators and Indices 585 
Prancis Ng 
C A Dataset on Trade and Production, 1976-99 589 
Alessandro Nicita and Marcelo Olarreaga Glossary of Trade-Related Terms 593 Bibliography 605 
Index 629 
CD-ROMs 
1 A Dataset on Trade and Production, 1976-99 
Alessandro Nicita and Marcelo Olarreaga 
2 Applied Trade Policy for Developing Countries: Outline, Content, and Readings for a Short Course 
Jaime de MeZo and Marc Bacchetta 
Tables 
3.1 Comparing "Great Depressions":Cameroon, Cóte d'Ivoire, and the United States 21 4.1 Revenue Impact of Trade Liberalization 25 6.1 From GATTtoWTO: Major Events 46 
7.1 Control ofFree-Riding in GATT Negotiations: U.S. Experience, 1947-67 53 
7.2 U.S. Imports Covered by Kennedy Round Tariff Concessions (Reductions plus Bihdings) as, a Share ofTotal U.S. Imports from fue Country Group 54 
7.3 Tariff Concessions Received and Given at fue Uruguay Round 57 8.1 Accessions to the World Trade Organization as of May 1, 2001 64 
9.1 Number ofDispute Settlement Cases, 1995 through September 2000 76 
11.1 Post-Uruguay Round Applied and Bound Rates of Industrial and Developing Economies by Major Product Group 98 
11.2 Tariff Escalation on Products Imported by Industrial Economies from Developing Economies 99 . 
11.3 Post-Uruguay Round Import -Weighted Applied and Bound Tariff Rates 99 11.4 Patterns ofProtection in Manufacturing, 1995 102 
12.1 Tariff Peaks and Imports, Quad Economies, 1999 108 
12.2 Tariff Peaks and Preferential Duty Rates, Quad Economies, 1999 110 12.3 Effects of Granting Duty- and Quota- Free Access to Quad Markets to LDC Exporters 111 
17.1 Evolution ofIndustrial Policies in EastAsia, 1950s-1990s 153 17.2 Policies and Measures for Promoting Exports in Asia 155 
21.1 Results ofIntegration Programs forATC Stages 1 and 2 189 
21.2 Number of Quotas Eliminated by Integration in ATC Stages 1 andl 190 21.3 Restrained Trade Freed of Quotas, 1995-97 190 
21.4 Expanded Market Access Attributable to Increases in Quotas (Stages 1 and 2 Combined) 190 
22.1 Frequency of Use of GATT Provisions That Allow Trade Restrictions, 1948-94 196 IV. 1 Summary of Selected GATS Negotiations and Domestic Policy Issues: Current Status and Desirable Outcomes 218 
25.1 Inadequacies of Statistical Domains with Regard to Modes of Supply 237 25.2 Average Annual Growth of Services and Merchandise Trade, 1990-99 238 25.3 Trade in Commercial Services by Region, 1990-99 239 
25.4 Share of Selected Economies in World Trade in Services, 1995 and 1998 239 
25.5 Exports of Services of Selected Economies by Selected Partners, 1995 and 1998 240 25.6 Evolution ofTransport;Travel, and Other Commercial Services, 1980-99 241 25.7 World Trade in Other Commercial Services by Category, 1996-98 241 
Contents 
25.8 Trade in Services by Mode of Supply, 1998 242 
25.9 Shares in Inward and Outward FDI Stocks, Selected Country Groups, 1990 and 1999 243 
25,10 Total U.S. Services Trade, 1994, 1996, and 1997 243 
26.1 Constructed Ad Valorem Tariff Equivalent "Guesstimates" by One- Digit ISIC Services Sector, Selected Countries 250 
26.2 FDI Restrictiveness Indices, Selected APEC Economies and Selected Services Sectors 250 
26.3 Estimated Tariff Equivalents in Traded Services: Gravity Model-Based Regression Method 252 
26A Average Gross Operating Margins of Firms Listed on NationalStock Exchanges, 1994-96, by Economy or Region 253 
26.5 Alternative Approaches to Modeling fue Impact of Barriers to Trade and Investment 254 26.6 Welfare Effects of 33 Percent Reduction in Barriers to Trade in AgricuIture, 
Manufactures, and Services 257 
27.1 Main Provisions afilie GATS 260 
27.2 Format and Example of a Schedule ofGATS Commitments 261 
27.3 Number of Committed Services Sectors by Member, JuIy 2000 263 
27A MarketAccess Commitments on Insurance (Life and Nonlife) under fue GATS 268 27.5 Market Access Commitments on Banking (Acceptance of Deposits and Lending of A11 Types) under fue GATS 270 
27.6 Current Status of GATS Commitments on Voice Telephone Services 273 
28.1 Types of Market Access Restrictions on Commercial Presence in Services Sectors, A11 WTO Members, 2000 281 
28.2 Developing Country Precommitments to Liberalize in Basic Telecommunications Negotiations, 1998 284 
30.1 Commitments by Sector and Mode of Supply (Professional Services) 308 
33.1 Specific Services Sectors Highlighted in fue Subregional Integration Agreements of fue Americas 342 
V.1 Summary of Selected TRIPS Issues: Current Status and Possible Approaches from a Development Perspective 349 
40.1 Performance Indicators for Government Procurement in Korea, 1993-98 424 41.1 Total Number of Countries That Have Established SPS Enquiry Points 435 44.1 Economies with Firms Convicted of Price Fixing by fue United States or the European Commission during the 1990s 458 
44.2 Cross- Border Mergers and Acquisitions in Latin America and Asia Pacific, 
1991-98 459 
48.1 Costs ofWorld Bank Customs Reform Projects, Selected Countries .496 48.2 Costs of SPS- Related World Bank Projects 497 
48.3 World Bank Projects Related to Intellectual Property Rights 499 54.1 Industrial Applied and Bound Tariff Rates 542 
54.2 Unbound Tariff Lihes by GATTMultilateral Tariff Negotiation (MTN) Category 543 A.1 Trends in Average Tariff Rates for Developing and Industrial Countries, 1980-99 562 A.2 Average Tariff Rates by Sector and FDI Inflows for A11 Countries in Recent Years 568 A.3 Tariff Escalation in Developing and Industrial Countries, 1994-2000 571 
AA Pre- and Post-Uruguay Round Nontariff Barriers for AlI Goods, Developing and Industrial Countries, 1984-93 573 
A.5 NontariffBarriers forAlI Products in Developing Countries, 1989-98 576 A.6 Tariff Peaks and Preference Margins, Callada, 1999 578 
A.7 Tariff Peaks and Preference Margins, European Unían, 1999 580 A.8 TariffPeaks and Preference Margins, Japan, 1999 581 
A.9 Tariff Peaks and Preference Margins, United States, 1999 582 
A.10 Comparison of MFN Applied Tariffs of Labor- Intensive Products, Selected Countries, 1997-99 583 
Figures 
11.1 Implications of a 40 Percent Reduction in Agricultural Trade Barriers 100 11.2 Share of Manufactures in Developing Country Merchandise Exports, Actual and Projected, 1965-2005 101 
12.1 Projected Changes in LDC Export Revenues as a Result of Duty- Free Access, by Product and Importer 112 
22.1 Renegotiations, Emergency Actions, and Voluntary Export Restraints (VERs), 
1948-93 198 
22.2 Renegotiations, Emergency Actions, Antidumping Actions, and Voluntary Export Restraints (VERs), 1948-93 200 
27.1 Number ofWTO Members Committing to at Least Part of an Aggregate Services Sector, July 2000 264 
27.2 Market Access Commitments by WTO Members on Movement of Natural Persons (Services Mode 4) 265 
29.1 Approaches toward Domestic Regulation at fue Multilateral and National Levels 291 33.1 Matrix of Possible Elements in Services Trade Agreements 343 39.1 Global Demand for Trademarks and Patents 408 
39.2 Nationality of Trademark and Patent Title Holders by Country Income Group, 1997 409 41.1 Number ofNotifications under fue SPS Agreement by Region, 1995-99 435 54.1 Implications of a Tariff Binding for fue Applied Rate of Protection 545 54.2 Welfare Implications of Tariff Bindings for a Small Country 546 55.A1 ARIA Involving Small Countries 557 
Boxes 
4.1 Export Taxes 27 
5.1 Key Questions for Determining fue Poverty Impact of a: Trade Reform 29 6.1 Transparency: Notification and Surveillance 45 
9.1 Special and Differential Treatment and the DSU: Some Examples 73 9.2 The Advisory Centre on WTO Law 75 10.1 The Bananas Case 87 
12.1 The European Union's "Everything but Arms" Initiative 106 13.1 The U.S. Trade and DevelopmentAct of2000 115 
15.1 TheWTO Agreement on Preshipment Inspection 132 
15.2 The International Convention on fue Simplification and Harmonization of 
Customs Procedures: 1999 Revision ofthe Kyoto Convention 135 . 16.1 Increasing fue Effectiveness ofPreshipment Inspection Services 143 16.2 Improving Export Clearance in Jamaica 145 
17.1 Nominal and Effective Rates of Protection 151 
17.2 Instruments of Industrial and Export Promotion Policies Employed in fue Republic ofKorea and Japan 152 
18.1 Matching Grant Schemes to Promote Exports 162 
18.2 Duty Drawback for Direct Exporters: The Chilean Case 164 18.3 Subsidies, fue WTO, and Developing Countries 168 
21.1 The Cost ofTrade Protection ofTextiles and Clothing in fue European Union 193 22.1 TheBasics ofWTO Antidumping Rules 201 
22.2 The Flawed Economics of Basing Decisions on an Injury Investigation 203 24.1 Realizing fue Gains from Financial Liberalization 223 
24.2 Contribution of Inefficient Internal Transport Systems to fue Concentration of China's Export Industries in Coastal Regions 225 24.3 Lessons from Reforming Argentina's Ports 227 
24..4 Welfare Gains from Services Liberalization: The Case of Tunisia 229 
24.5 Achieving Effective Competition in Telecommunications: The Asian Experience 233 25.1 Services Statistics and the GATS 236 
25.2 Improving Data on Trade in Services 244 
27.1 Financial Services: Market Access Commitments of Developing and Transition Economies 267 
28.1 Services Exports by Developing Countries: Potential Gains and Current Barriers 286 29.1 Whose Regulations, and for What Purpose? Sticky Issues in ElectroÍ1ic Commerce 292 29.2 Assessing fue WTO Telecommunications Reference Paper 293 
29.3 Rules for Domestic Regulations: The Experience with Accountancy 295 29.4 Challenges in Implementing Procompetitive Regulation 297 
29.5 Financial Sector Liberalization: The Need for Policy Coherence 299 29.6 Financial Liberalization and Access to Credit by the Poor 301 
29.7 Pursuing Social Objectives in Competitive Telecommunications Markets 302 30.1 Immigration Patterns in OECD Countries 309 
31.1 The Economics and Law of Duty-Free Electronic Commerce 319 
32.1 ASEAN Proposal for a GATS Emergency Safeguard Mechanism 330 35.1 An Overview of Intellectual Property Rights 360 
35.2 Combating Disease Worldwide: Fostering fue Required R&D 366 36.1 Pharmaceutical Policies and fue TRIPS Agreement 374 36.2 Differential Pricing 378 
36.3 Health Care Systems and Essential Medicines 380 
40.1 Accession to the GPA: Identifying Costs and Benefits 425 41.1 SPS Measures: The Kenya Fish Exports Case 430 
41.2 Standards-Related Problems Encountered by Indian Exporters 433 41.3 Moving Forward: A Proposal 438 
42.1 WTO Rules on FDI: A Positive View 441 
43.1 Why Competition Policy Should Not Be Seen through a Market Access Lens 450 43.2 Free Trade and Competition Policy 452 45.1 WhatAre Core Labor Standards? 464 
45.2 Trade and Labor Standards: Three Debates 466 
46.1 Basic PrincipIes of Environmental Regulation 474 47.1 Café au Lait Diplomacy 489 
48.1 Costs of Implementing the WTO Agreements: The Jamaican Experience 502 51.1 Export Diversification in Africa: Elements of a "Business Plan" 523 
55.1 Selected Major Regional Integration Agreements and Dates of Formation 549