Background
The Tokyo Round refers to a series of international trade negotiations conducted under the auspices of the General Agreement on Tariffs and Trade (GATT) from 1973 to 1979. The primary focus of these negotiations was to reduce tariff barriers to international trade and extend the reach of GATT regulations.
Historical Context
Opening in Japan in 1973, the Tokyo Round was the seventh such round of negotiations since the inception of GATT in 1947. The context for these discussions was an increasing recognition of the need to foster global trade relations amidst the economic uncertainties of the 1970s, including the oil crisis.
Definitions and Concepts
- General Agreement on Tariffs and Trade (GATT): An international treaty created after World War II to lower trade barriers and facilitate global commerce.
- Tariffs: Taxes imposed by governments on imported goods to protect domestic industries or to generate revenue.
- Non-tariff Barriers: Trade restrictions that result from non-tariff policy measures such as quotas, embargoes, sanctions, or levies.
- Agricultural Protection: Government policies that protect domestic farmers from foreign competition using tariffs, subsidies, and other measures.
Major Analytical Frameworks
Classical Economics
Promotes free trade between nations, believing it leads to increased economic welfare for all involved.
Neoclassical Economics
Uses models considering the benefits of tariff reduction on consumer surplus and the efficiency of markets.
Keynesian Economics
Examines the effects of international trade agreements on national employment and fiscal policy.
Marxian Economics
Critiques global trade negotiations as skewed in favor of capitalist, industrialized nations, potentially exacerbating global inequalities.
Institutional Economics
Highlights the role of institutions in successfully negotiating and implementing trade agreements like the Tokyo Round.
Behavioral Economics
Study of psychological factors affecting negotiation processes and outcomes during international trade talks.
Post-Keynesian Economics
Focuses on how trade agreements might influence economic stability and distribution of wealth.
Austrian Economics
Advocates for minimal government intervention in trade, emphasizing the benefits of unregulated free markets.
Development Economics
Analyzes how trade agreements impact developing countries’ economic growth and structural transformation.
Monetarism
Examines the impact of trade policy on national money supply and inflation.
Comparative Analysis
The Tokyo Round differed from previous GATT rounds by including non-tariff issues and contemplating more complex agreements beyond just tariff reductions. Although successful in reducing tariffs on a wide range of manufactured goods, it fell short in achieving substantial progress in agricultural protection and other non-tariff barriers.
Case Studies
Examining participating countries’ trade policies before and after the Tokyo Round, one can see significant drops in tariff levels and changes in trade volumes. For example, examining Japan’s post-Tokyo Round economic outcomes reveals substantial growth in manufacturing exports.
Suggested Books for Further Studies
- “Global Trade Policy: From Liberalism to Protectionism” by Pamela Bintliff
- “The GATT/WTO: An Institutional Approach to Global Trade and Integration” by John Greenville
- “Trade and Inequality in Global Perspectives” by Radikha Puri
Related Terms with Definitions
- Uruguay Round: Subsequent round of trade negotiations under GATT that took place from 1986 to 1994, leading to the establishment of the World Trade Organization (WTO).
- Doha Round: The most recent and still incomplete round of trade negotiations aimed at achieving major reform of the international trading system through the introduction of lower trade barriers and revised trade rules.
