WHAT DO WE KNOW ABOUT TRADE AND TRADE POLICY?2
Since World War II, the main instrument of trade policy, tariffs, among ad- vanced industrial countries have been reduced to insignificant levels. After the latest round of international trade negotiations, the Uruguay Round, completed in 1994, the average tariff for the developed countries was reduced from 6.3% to 3.8% [World Trade Organization (WTO) 1996:31]. On the other hand, non-tariff barriers—which include quantitative restrictions, price controls, subsidies, voluntary export restraints, etc—have proliferated, in part making