Transatlantic differences on trade and tariff policy

Abstract

The paper evaluates the significance of existing and potential future conflicts between the United States and Western Europe on matters of trade and tariff policy, and suggests ways in which these conflicts might possible be resolved. The evolution of trade policy since the 1930s and its current status as codified and implemented by means of the General Agreement on Tariffs and Trade is first briefly reviewed. Some facts regarding the commodity structure and geographic distribution of the trade of the U.S. and Western Europe and the import duties and other restrictions used by these regions to protect domestic producers are then provided. The issues, outcome, and unresolved problems of the Kennedy Round of GATT tariff negotiations that was concluded in mid-1967 are then discussed, before a number of issues that were on the whole bypassed during the Kennedy Round and that are potentially disruptive to trade relations are examined. Various alternative methods by which further trade liberalisation can be pursued are then considered. Finally, future foreign trade policy for the U.S. and Western Europe are considered.

JEL: F13