ICTIONS on international trade,
primarily in the form of non-tariff barriers,
have multiplied rapidly in the 1980s.’ The
Japanese, for example, began restricting
automobile exports to the United States in 1981.
One year later, the U.S. government, as part of
its ongoing intervention in the sugar market,
imposed quotas on sugar imports.
The increasing use of protectionist trade
policies raises national as well as international
issues. As many observers have noted, international
trade restrictions generally have costly
national consequences.
5 The net benefits received
by protected domestic producers (that is,
benefits reduced by lobbying costs) tend to be
outweighed by the losses associated with excessive
production and restricted consumption
of the protected goods. Protectionist trade
policies also cause foreign adjustments in production and consumption that risks retaliation
by the affected country.
As a type of protectionist policy, non-tariff
barriers produce the general consequences identified
above; however, there are numerous
reasons, besides their proliferation, to focus attention
solely on non-tariff barriers!’ Non-tariff
barriers encompass a wide range of specific
measures, many of whose effects are not easily
measured. For example, the effects of a government
procurement process that is biased toward
domestic producers are difficult to quantify. In
addition, many non-tariff barriers discriminate
among a country’s trading partners.
This discrimination violates the most-favorednation
principle, a cornerstone of the General
Agreement on Tariffs and Trade (GATT), the
multinational agreement governing international
trade. Not only does the most-favored-nation