We Need a Strategic Trade Policy

Bilateral Free Trade Agreements: A Critical Assessment and WTO Regulatory Reform Proposal

This paper analyzes the effects of changes in relative commodity prices on the distribution of income among factors of production in the context of two models of a simple, two-good economy. In the first model capital is treated as a specific factor in each industry, with labor mobile between industries. The assumption of specificity determines the direction of factor income changes, with magnitudes depending on substitutability between factors and on intensities of factor use within the two industries. In the second model, capital is viewed as a quasi-fixed factor. For the short run, this model is identical to the model first considered. For the long run, this model is identical to the Stolper-Samuelson model in which the direction and magnitude of factor income changes depend solely on relative factor intensities. The difference between the short-run and long-run determinants of changes in factor incomes gives rise to a conflict between factor owners' short-run and long-run interests.

NAFTA: A U.S. PERSPECTIVE Robert C. Fisher O,? June 12, 1991, Ambassador Carla A. Hills, the U.S. Trade Representative , met in Toronto with Dr. Jaime Serra Puche, Mexico's Secretary ofCommerce and Industrial Development, and Michael Wilson, Canada's Minister for International Trade and Industry, Science and Technology, to formally launch negotiations for the North American Free Trade Agreement (NAFTA). Their meeting came almost a year after President George Bush and President Carlos Salinas de Gortari of Mexico first endorsed the goal of a comprehensive free trade agreement between the United States and Mexico, and four months after the two presidents and Prime Minister Brian Mulroney of Canada agreed to expand the U.S.Mexico talks into trilateral negotiations aimed at freeing trade and investment flows within North America. Even before the initial presidential endorsement of a bilateral U.S.Mexico Free Trade Agreement (FTA), the NAFTA was on its way to becoming one ofthe most hotly debated trade policy issues in recent memory. For its proponents, the NAFTA's logic is simple: the agreement will set up a continental market of360 milüon consumers and $6 trillion in total output, create jobs, promote growth, and strengthen the ability of North American producers to compete both within North America and in the world markets. It represents the first major step toward hemispheric free trade, as envisioned in the President's Enterprise for the Americas Initiative. Robert C. Fisher is Director, Mexican Affairs, at the Office of the United States Trade Representative. The views expressed in this article are his own and do not necessarily represent those of USTR or the U.S. government. 43 44 SAISREVIEW The NAFTA's opponents in the United States see it as another threat to U.S. jobs, particularly in manufacturing. They fear both an onslaught of low-price imports from Mexico and the wholesale relocation of U.S. firms to take advantage of low Mexican wages or lax environmental standards. Others, both active opponents and those whose judgment is suspended pendingthe negotiation's final outcome, are concerned that the NAFTA will worsen environmental problems in Mexico and the United States or result in unsafe products threatening the health and safety of U.S. consumers. This article examines some of the factors affecting the U.S. decision to pursue the NAFTA, the benefits the NAFTA should present to the United States, the measures that the Administration is taking to limit the potential adjustment costs, and the relationship ofthe NAFTA to overall U.S. trade policy.1 Mexico's Trade and Economic Reforms In the mid-1980s, most trade policy experts would have predicted that a NAFTA or a bilateral U.S.-Mexico FTA would not occur until the 21st century. The United States and Mexico shared strong trade and economic bonds based on proximity, but they shared little in the way of common policies. The United States was a member of the General Agreement on Tariffs and Trade (GATT), and Mexico was not. In 1979 Mexico had taken preliminary steps to join the GATT, but backed away a year later. U.S. trade and economic policy was based on free market and free trade principles. In Mexico the state intervened in almost every aspect of economic decision making, with highly protectionist trade barriers, state ownership of major sectors of the economy, and an overly regulated business environment. The NAFTA was made possible by an economic revolution that took place in Mexico starting in the mid-1980s, under the leadership of President Miguel de la Madrid. Without it, the United States would not have been willing to pursue the NAFTA negotiations. In the aftermath of the debt crisis of the early 1980s, Mexico undertook a series of macroeconomic reforms, in addition to new trade initiatives . The reforms required substantial austerity, including reductions in government expenditures and the public deficit, privatization of many of 1. While the article discusses the NAFTA, much of the focus is on U.S.-Mexican issues, rather than U.S.-Canadian issues. The United States, Mexico and Canada are equal partners in the negotiation and all three are actively engaged in developing the NAFTA The focus of the article reflects...

Can joining the World Trade Organization (WTO) bring us tangible short-term benefits? If this question had been posed two years ago, the answer that we would have gotten from our folks in economic and trade circles would most likely have been a largely positive and affirmative one. At that time, China's competitive strength in terms of its exports was strong: the volume of our exports was rising with each day, and, in particular, our trade surplus with regard to trade with the United States was growing in a major way—even though a significant part of that trade was entrepôt trade. At that time, the United States even resorted to repeatedly threatening us with withdrawing its "most-favored-nation" trade relations with China as a way of demanding that China reduce its trade surplus with the United States. If we had joined the WTO (or, at that time, General Agreement on Trade and Tariffs [GATT] then, we at least would have been able to avoid this threat on the part of the United States and there would have been less interference in Sino-U.S. trade relations. Today's situation, however, is somewhat different. Because of the enormous impact of the Southeast Asian financial storm, and because the Chinese government, considering the larger picture, has decided to maintain the value of the renminbi, there is already a considerable loss on the part of China's export competitiveness in an objective way; furthermore, from the perspective of the statistical data for the first quarter in 1999, the extent of this damage is likely to continue to expand. If China continued to maintain the value of the renminbi and keep it from devaluation, then the pressure of China's trade surplus with the United States would be alleviated and this trade surplus, in terms U.S. interests, would most likely be gradually replaced by a trade surplus on the part of the countries of Southeast Asia and Latin America in their trade with the United States. At the same time, the trade-related friction between China and the United States will gradually be lessened. In that sense, the significance to the United States of China's joining the WTO—in terms of "alleviating" [China's] so-called threat to the United States as a most-favored nation—is already no longer as great as it once was. Furthermore, along with the eruption of financial crises in many regions and locations in the world one after another, the world economy has already lapsed into a rather long-term state of stagnation. Although China may still need to continue to take hold of "both markets"—that is, both the overseas market and the domestic market—it must also discern that we cannot continue to adhere to a "lopsided" strategy of relying on exports to pull along the growth of the economy, and that, instead, we must turn more of our attention to relying on the domestic demand.

International Tax Policy in the Context of Integration and Trade: The Case of the US Free Trade Agreements

Purpose: Despite the free and lower trade tariff policy, the United States (US) has recorded a persistent trade deficit and trade imbalances in the last four decades ago, therefore, this study empirically investigates the role of trade tariff policy on US supply chain imbalance and trade deficits reduction. Methodology: The study employs simple random and stratified sampling techniques to analyses the trend and univariate. Secondary data from US Census Bureau of Economic Analysis Department of Commerce on US international trade in goods and services from 1852 to 2024 were analysed to drawn inferences. Findings: This study finds that US trade tariff policy is not automatic to reduce supply chain imbalances and trade deficits in the United States. The US trade liberalization policy is associated with supply chain imbalance and trade deficits while the U.S. trade protectionism policy accounted for more trade surplus and supply chain balance. Also the study finds that a minimum threshold of 10 percent US weighted trade tariff rate to reduce the US trade supply chain imbalance and trade deficits Unique Contribution to Theory, Practice and Policy: This study supports the protectionism trade theory over the trade liberalization theory to aggressively promote exports but reduces imports through a number of trade barriers like tariff rate, imports restriction, and currency depreciation (devaluation) to make trading partners imports dependence while protecting country’s domestic industry from foreign competition. Recommendations to the current US President, Trump is to set a minimum of 10 percent weighted tariff rates on all goods and services to other trading partners while US should imposes a higher weighted tariff rates above 10 to all goods and services from China to swiftly reduce US trade deficits and supply chain imbalance to be more effective than Trump former US President administration and also President Biden administration.

IN RECENT YEARS, THE CANADIAN GOVERNMENT has emerged as a leading proponent of western hemispheric trade liberalization and transatlantic free trade. Its efforts to transform the North American Free Trade Agreement (NAFTA) into a Free Trade Area of the Americas (FTAA) and to promote free trade between NAFTA and the European Union (EU), however, have not been successful. Ottawa's ability to lead regional and inter- regional initiatives is constrained because Canada lacks the political and economic weight of the major powers, whose support is critical to bring such projects to completion. Ottawa should continue to promote free trade, but it should focus its efforts on broadening and strengthening its own relations within the hemisphere and with Europe.THE WESTERN HEMISPHEREWhen Brian Mulroney's Progressive Conservative government announced in 1989 that Canada would join the Organization of American States, Canada's role in the region was enhanced. But it was Ottawa's decision the following year to join Mexico and the United States in negotiating NAFTA that gave economic substance to Canadian policy.The NAFTA negotiation was the result of Mexico's decision to seek free trade with the United States. The administration of George Bush incorporated the Mexican initiative into its Enterprise for the Americas Initiative, the focus of which was to reinforce economic growth and political reform in Latin America through trade, debt relief, and investment. The key element of the programme was the willingness of the United States to begin to create a hemispheric free trade area 'stretching from the port of Anchorage to the Tierra del Fuego.'(f.1) Although the Canada-United States Free Trade Agreement negotiated three years earlier would become a model for NAFTA, Ottawa was not eager to join the talks. Canada's trade and investment ties with Mexico were limited and the government was not anxious to reopen the divisive domestic debate that had accompanied free trade with the United States. It decided to participate in order to avoid a 'hub and spoke' arrangement that would leave the United States as the only country with privileged access to the others' markets. After the negotiations began, Ottawa's main objective was to protect and improve upon the gains it had achieved in the Canada-United States pact.By the time the bruising United States debate over ratification of NAFTA, which pitted labour and environmental groups against free trade supporters, ended in 1993 American enthusiasm for hemispheric free trade had faded. Deepening divisions in Congress over the place of labour and environmental standards in trade pacts prevented President Bill Clinton's administration from securing renewal of 'fast track' authority to negotiate future agreements that would not be subject to legislative amendment. The result was that the United States was no longer able to play its crucial leadership role in trade matters.(f.2)As the United States commitment to hemispheric free trade weakened, Canada's commitment increased. Jean Chretien's Liberal government, which had been highly critical of NAFTA while in opposition, reversed itself when it came to power and became a leading supporter of the agreement's expansion as a stepping stone to free trade in the hemisphere. A hemispheric accord would allow Ottawa to diversify its trade and to broaden the basis of its interaction with the United States while extending support for the multilateral trade system.The Canadian government, which had been encouraging the Clinton administration to continue its trade liberalization course, was therefore pleased when, at the December 1994 Summit of the Americas, thirty-four countries endorsed the president's proposal to negotiate a Free Trade Area of the Americas by 2005. In the meantime, Canada, the United States, and Mexico would explore ways to bring other countries into NAFTA. Chretien, Clinton, and the Mexican president, Ernesto Zedillo, announced that negotiations would begin the following month to bring Chile, which was seen as a key link between North and South America, into the agreement by 1 January 1996. …

Purpose - The purpose of this paper is to study strategic trade policies under international process research and development (R&D) competition with or without market leaders for free trade and a subsidy regime and compare the effects of R&D subsidies and export subsidies on the equilibrium levels of firm profit and social welfare. Design/methodology - For the analysis, we use previous work by Haaland and Kind (2008) and construct a differentiated goods duopoly model, wherein two firms compete via quantity in a thirdcountry market for free trade and the subsidy regime. We consider simultaneous-move quantity competition when the two firms choose their quantities simultaneously and sequential-move quantity competition when they choose their quantities sequentially. The results are compared to those of Balboa, Daughety and Reinganum (2004), who studied export subsidies. Findings - The following are the findings. First, the results of firm preference orderings regarding firm position from Dowrick (1986) and Balboa, Daughety and Reinganum (2004) may not hold in our model when the firms’ strategies are strategic substitutes under free trade. Second, the preference rankings under Cournot competition for free trade and a subsidy regime are the same as those in the strategic trade policy of export subsidy. Third, except for the cases of too close substitutes and complements, the results of firm and government preferences regarding firm position are different from those of Balboa, Daughety and Reinganum (2004) in that Stackelberg leadership in a subsidy regime is advantageous when the goods are substitutes but is disadvantageous when the goods are complements. Moreover, the equilibrium level of firm profit is the highest in the Cournot-Nash play when the goods are substitutes in a subsidy regime. Fourth, except for the cases of too close substitutes and complements, the results of firms’ and their respective governments’ trade regime preferences are similar to those of Balboa, Daughety and Reinganum (2004) in that a Stackelberg leader firm and government prefer free trade if the goods are substitutes and prefer a subsidy regime if the goods are complements. Furthermore, a Stackelberg follower firm and government strongly prefer a subsidy regime to free trade. Originality/value - By analyzing the effects of R&D subsidies and export subsidies in international markets, we can find similarities and differences between them in international markets.

In this interesting book, Francine McKenzie writes about an institution that was central to the making of a new international order after World War II: the General Agreement on Tariffs and Trade (GATT). Through a concise, well-structured series of topical chapters, we learn about the political history of GATT from its origins in 1948 to its eventual dissolution within the World Trade Organization in 1994. McKenzie relies on an approach that is rich in primary sources and focuses on the links between international trade and international political relations. This allows her to provide a vivid description of “the way people have thought and talked about trade” (236).Readers of Agricultural History will be primarily interested in the last chapter, about “the agriculture challenge to GATT” (232). McKenzie portrays agriculture as “GATT's greatest failure” (232). Her analysis of agriculture in GATT goes back to the 1950s and 1960s, when first the United States and later the newly created European Economic Community (EEC) succeeded at implementing agricultural policies opposed to GATT's liberal principles. This gives McKenzie the chance to show us how difficult it would become to reintroduce agriculture in the pro-trade agenda, which eventually happened during the turbulent Uruguay round of the late 1980s and early 1990s.As elsewhere in the book, the analysis is finely nuanced. The United States and the EEC (and, within the latter, France in particular) are given the major roles that they deserve, but this does not prevent us from perceiving the important role that other states played in some critical junctures, for instance Australia as a promoter of the “Cairns group” that pressed for agricultural liberalization from the mid-1980s onward. McKenzie credibly portrays GATT as a flexible organization. Quite often we find it unable to impose its agenda on states, but it manages to establish a certain kind of normative authority: even those countries that deviated from GATT principles wanted GATT to certify their deviation as a justifiable exception to the rule. This is one of the ways in which trade liberalization came to be widely accepted as the default policy.Some of the limitations of the book are, in this reviewer's opinion, transparently presented by the author when she explains her purposes. The focus is on international governance, not on its economic and social effects. The epistemology borrows some concepts from political science but not much, since the author is focused on those forces that really mattered to policy makers. This imposes some limits. In the “clash between those who had faith in free trade and those who feared it,” the author seems to be on the believers' side, but the foundations of her position are not very explicit (290). A long tradition in political economy, from Friedrich List in the nineteenth century to Ha-Joon Chang today, has questioned the classical position that free trade must always be the default policy. It would have been interesting to assess which of the pro-trade arguments defended by GATT were solid and which were not, as well as the way in which different contexts probably required different recipes. It would have also been interesting to see the author engage with the historical institutionalist approach to political science that has been fruitfully applied to the history of agricultural policy by Adam Sheingate. Yet it would be unfair to criticize McKenzie for not doing what she is transparently saying that she will not do. In social science (as in trade policy), one size does not fit all.Perhaps a different kind of issue is the bias toward Anglo sources. These are sources that allow McKenzie to capture perspectives from the Anglo world and from GATT itself, but not as much from other countries and organizations. I am thinking of France and the European Economic Community in particular. How different would the international history narrated in this book have been if French- and German-language sources, for instance, had been used more extensively?Notwithstanding these drawbacks, the book will undoubtedly be of great interest to agricultural historians. Alongside its general virtues, it provides researchers interested in agricultural policy with something that is fundamental: the bigger picture. The world of agricultural politics is so complex and multifaceted that specialists are always in danger of losing themselves in the maze. But the maze can be understood in a better way if, as McKenzie consistently does in this book, agriculture is positioned within a more general view of collaboration and conflict between states and emerging patterns of international governance.

This paper focuses on strategic trade policy in the form of export subsidies in Cournot duopoly structure for differentiated goods. Export subsidies affect social welfare in both static and dynamic situations , and the aim of this paper is to analyze and compare the welfare effects of export subsidies in one-period and multi-period games in differentiated goods markets. To analyze the welfare effects of export subsidies, a two-stage game of complete but inperfect information is considered. In the first stage, two governments determine the amount of export subsidies and in the second stage, two firms determine the product level. The results show that, given that the firms’ competitiveness do not differ so much, export subsidies by both governments increase the firms’ profits and decrease social welfare of both countries. In an infinitely repeated game with different discount factors for both countries, and by adopting trigger strategy, we create some conditions, in which both governments commit free trade. However, if the competitiveness of one firm is so greater than the other, free trade using trigger strategy is not stable and the country with more competitive firm has incentive to deviate.

The paper addresses current issues in Japan-U.S. foreign trade following the signing of the Japan-U.S. Trade Agreement and the Japan-U.S. Agreement on Digital Trade in October 2019. By providing an overview of Japan-U.S. trade relations, analyzing current trends in bilateral foreign trade and outlining basic terms of new bilateral agreements, the authors conclude that “path-dependency” in Japan-U.S. contemporary foreign trade persists and trade relations between the two countries are to a greater extent influenced by the U.S. trade policy which aims to assure a broader access of American companies to Japanese markets – the situation that was typical for bilateral trade relations since the 1980s. “Path-dependency” in Japan-U.S. trade relations, conventionally categorized by the existence of numerous trade contradictions, is pronounced in the unchanged goals, strategy and tactics of foreign trade negotiations. The United States maintains its “attacking” role and dominates in the bilateral trade negotiations, while Japan, despite its enhancing influence in the multilateral trading system and regional trade agreements, is forced to “self-defend” and make concessions to a more dominant partner in order to maintain its automobile exports to the United States at the expense of its national interests in other industries, particularly in the agricultural sector. Thus, new trade agreements are unlikely to cause significant structural changes in Japan-U.S. bilateral trade in the shortterm as the problem of persistent trade deficits remains. In order to break the vicious circle of “path-dependency” Japan is to actively cooperate with the economies of the European Union which have large amounts of trade deficits with the U.S., can serve as a mediator in the U.S. – China trade conflicts, as well with other Asian countries via mega-FTAs which possess potential risks to the United States. Further development of foreign trade cooperation will depend on the initiatives of new governments in both countries.

Regional Integration (RI) has been a growing phenomenon in the last decades because the benefits associated with it, particularly in terms of trade. Despite the benefits, the issue of Non-Tariff Barriers (NTBs) has become a major concern, thus triggering a number of trade disputes among nations. To improve trade relationship with one another, three African regional trade blocs, namely, Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Council (SADC) entered into an agreement to form a single market through launch of a grand Tripartite Free Trade Area (FTA). An important issue that followed this agreement was the use of an On-line Complaint Reporting, Monitoring and Eliminating Mechanism starting in year 2009 and formally launched in June 2011. This mechanism was meant to enhance transparency and easy follow-up of reported and identified NTBs from participating members and would possibly reduce complaints. Despite this launch, a review of the website indicates surfacing of new NTBs and even some recurrence previously reported ones. The online reporting mechanism has become a paradox. Complaints have continued to proliferate in different forms, hence NTBs that destabilize the objective of realising free trade in the COMESA, EAC and SADC area. Trust Theory is used to help understand the main cause/source of many complaints and the resultant NTBs. The subsequent implication of these NTBs on the status of trade among the concerned economies also needs investigation. Complaints registered on-line in COMESA, EAC and SADC Website from 2009 to 2017, are used as data for the study . This paper, contributes to knowledge by enabling understanding of trust in regional integration literature and future prospects of this on-line reporting mechanism.

Reviewed by: Auto Pact: Creating a Borderless North American Auto Industry, 1960–1971 Wayne Lewchuk Auto Pact: Creating a Borderless North American Auto Industry, 1960–1971. Dimitry Anastakis. Toronto: University of Toronto Press, 2005. Pp. 285, illus., b&w, $29.95 paper, $55.00 cloth On the eve of the twenty-first century, one in seven Canadians owed their employment to the automotive sector and one in five vehicles assembled in North America was assembled in Canada. Understanding how Canada became a preferred location for North American automotive production is essential for anyone interested in Canada's post–Second World War economic development. The Auto Pact plays a central role in understanding this story. Given the contrasts between the principles of the Auto Pact and more recent free trade agreements, understanding how and why this policy was adopted is both timely and necessary. Anastakis begins by examining the crisis in the automobile sector in the early 1960s and policy alternatives. One option was to increase protection of Canadian manufacturers, with the likely result of higher prices for cars sold in Canada and reduced choice for consumers. The alternative was free trade, which would almost certainly have led to hardship for Canadian producers. The Auto Pact was an ingenious compromise. Trade would be organized on a continental basis. Automotive production could flow duty free between Canada and the United States, subject to constraints on both sides. Material could be imported into Canada duty free by firms that produced as many vehicles in Canada as they sold. US-based manufacturers could organize production on a continent-wide basis, and Canada would get its 'fair' share of North American production. The author presents in detail the steps leading to the Auto Pact. The earlier failure of the continental free trade deal in agricultural implements was very much in the minds of the Canadian framers of the Auto Pact. The agreement was also influenced by the growing willingness of Canadian policy makers to question our close economic relationship with the United States. This caution led to attempts (largely unsuccessful) to diversify our trade, away from the United States. More successful was the use of trade policy to resolve imbalances with the United States. For example, duty-remission programs encouraged increased exports of Canadian production to the United States through positive economic incentives. The United States was highly critical of these policies. But rather than fold in the face of criticism, Canadian policy makers demanded a fair share of automobile production. The Auto Pact was the result. Before the deal could be finalized, an exemption was necessary from the [End Page 326] General Agreement on Tariffs and Trade, as it violated the principle of bestowing preferential treatment. That such an exemption was granted points to how different the 1960s were, compared to trading relationships today. Given the recent experience with softwood lumber and the more intense competition over global market share in the automotive sector, it is hard to imagine such a deal being sanctioned by the international community today. The Auto Pact reflected an emerging sense of economic nationalism. It was one of the lasting legacies of Walter Gordon and the period when Liberal politicians endorsed nationalistic trade policies. Other countries, including Mexico and Australia, pursued different polices in the face of US dominance. They moved to protect their producers and their share of vehicle-production employment through protective tariffs and domestic content regulations. Canada embraced a form of continental free trade with guarantees of a fair share of employment. This approach had the advantage of ensuring Canadian jobs and reasonably priced vehicles, but the disadvantage was that it left the Canadian industry largely in the hands of the original 'Big Three.' Until the 1990s, this looked like a good arrangement. Production exceeded the minimum safeguards, employment expanded, and vehicle costs were kept relatively low. Today the heavy reliance on US-based producers is questioned by some, as they themselves find it difficult to compete in the new global economy. Others have more deeply explored the contribution of labour to this deal. The volume is also relatively silent on the role Canada was asked to play by the United States in supporting its global...

The article defines the directions of Ukraine’s trade policy under multipolar globalization, which assumes that the centers of development and trade are concentrated both among developed and developing economies. The article analyzes the development of Ukraine's trade with the leading economies of Asia - China, India, Japan and the Republic of Korea, which have created a powerful pole of world trade in Southeast Asia. However, domestic exports to these countries are developing unevenly and at a moderate pace. The latter is explained by the specific features of the trade regime of these countries, primarily the high level of non-tariff market protection. Domestic exports to Asian countries remain extremely undiversified with the predominance of one or two goods in the structure: mainly ores and corn are exported to China, to India - sunflower oil, to Japan - ores and tobacco products, and to Korea - corn and wheat. Estimates of the volume of trade in domestic goods after the full-scale invasion of the Russian Federation into Ukraine show that in the first half of 2022 alone, the exports to Asian countries decreased by 49%, and the imports decreased by 20%. It is assumed that by the end of 2022, the volume of foreign trade turnover between Ukraine and the People’s Republic of China may decrease by an average of 32.9% compared to 2021, India – by 41.9%, Japan – by 26, 6%, and Korea – by 28,5%. Diversification of commodity exports with an emphasis on goods with a higher share of value added is defined as an important direction of trade policy in relation to the leading countries of Asia. In particular, prospective agricultural export products to Asian countries are honey, chicken, dairy products, etc. Prospective industrial goods include inorganic chemical products, fertilizers, wood products, nuclear reactors, etc. Recommendations for improving Ukraine’s trade policy have been developed, and the need is substantiated to conclude free trade agreements in order to further develop Ukraine’s trade with leading Asian countries. Also, the need to abandon the idea of negotiating a free trade agreement and investment agreement with China has been proven. The article analyzes the policy of economic patriotism pursued by the Indian government, in particular as a response to the full-scale invasion of the Russian Federation into Ukraine. The authors note India’s disagreement on issues of opening markets for sensitive agricultural products, which causes the complexity and delay in the negotiations on free trade with this country. Access to the markets of Japan and the Republic of Korea is complicated by the high level of tariff and non-tariff barriers. However, the analysis of the trade policy of these countries shows that a significant part of markets of both agricultural and industrial goods in these countries were opened due to the numerous FTAs. It is recommended to initiate negotiations on free trade with Japan and the Republic of Korea in order to improve Ukraine’s competitive position in the markets of these countries.

Since World War II trade negotiations under GATT reduced tariff protection to one-eighth of its pre-war level. From the mid 1970s however, protection increased again, in particular non-tariff barriers were being used. Furthermore, strategic trade policies use subsidies and other non-border protective measures. Protection prevents the world economy from gaining full benefits from specialization combined with expansion of trade. Unlike tariffs, non-tariff barriers fragment the market and encourage a bilateral approach in negotiating trade agreements. Strategic trade policies are difficult to apply properly and may evoke retaliation. Nondiscrimination is the main principle of GATT, on which the present international trading system is based. In order to maintain it, trade negotiations under GATT will hopefully lead to international consensus on the proper use of non-tariff barriers and instruments of strategic trade policies.[/p]