General Agreement on Tariffs and Trade in E-Commerce

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General Agreement on Tariffs and Trade in E-Commerce

The US is seeking to extend the duty-free status of international online transactions to protect the development of global electronic commerce, the Clinton administration said yesterday. Susan Esserman, deputy US trade representative, said the US wanted the World Trade Organization to agree "at the earliest possible date" to extend the current moratorium on customs duties for electronic trade.

In testimony to the Senate foreign relations sub-committee on Europe, Ms Esserman said duty-free cyberspace was particularly valuable to US software companies that were seeking to distribute their products electronically.

The US is also looking for WTO members to affirm that electronic commerce is subject to existing rules and agreements, and should not face "unnecessary regulatory barriers to trade". However Ms Esserman said "more time and work are necessary" before electronic goods could be subject to final classification under WTO rules.

Electronic commerce in the US is forecast to grow to $1,300bn by 2003, while in India it is expected to grow by $15bn within two years. Richard Wolffe, Washington

Protectionism, it seems, is always with us and it is useful to examine the intermittent attempts made to establish rules for its containment. This book is one such examination, on the conception, birth, and early years of the General Agreement on Tariffs and Trade (GATT); it is restricted to the years 1940--53. It is the work of an historian but one at the political, rather than economic, end of the spectrum. The heavy emphasis throughout is on the American role within an essentially Anglo-American tussle. The argument is that although trade was a relatively small proportion of US output it was used for political and diplomatic purposes. The general thrust is that the US was

keen on a new liberal order and determined to break the British empire's preferential trading arrangements. However, when we read that the central argument is that, 'by liberalizing trade while protecting domestic economies -- a bargain consistent with US trade law, practice, and history ...', we might reasonably expect to be in for a roc ky ride.

Politics is important and possibly even central in the process of trade protection, but will always be found to depend on economic forces. The politics...

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...sn’t have enough of its own trees to meet its demand for paper. The cheapest way for the Japanese to meet their paper needs has been to import raw logs from America, a trade which ended in the 1980s because there simply was not enough timber to supply Japan and satisfy domestic U.S. needs. Free trade, of course, demands that traders sell to the customer who offers the highest price; they cannot be required to fill the needs of one market at the expense of another. Should Americans sell to Japan at higher prices even if it means domestic shortages, or is it appropriate to say, "These are our trees, hands off"?

The arguments that apply to protecting timber can also be easily applied to other natural resources, such as coal or copper. On the other hand, free trade agreements work to the benefit of the United States in terms of resources where we cannot fill our own needs, such as oil or gold. Although each of these arenas has its own specific issues, in each case the essential question boils down to: "Is this important enough to our country that we should protect ourselves against the inroads of foreign traders, thereby cutting ourselves off from the benefits of free trade?"

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