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In 1973 Sweden entered into a free-trade agreement with the EEC. This meant that the EEC principle of prohibition of cartels met with the Swedish principle of abuse. Paper production was heavily cartelised in Sweden and Scandinavian export cartels exercised a strong influence over EEC markets. The problem is analysed in terms of legitimacy – how did the Swedish actors make their claims legitimate? When analysing the arguments used in the negotiations it becomes clear that the Swedish negotiators claimed that paper cartels and no tariffs provided more general utility whereas the EEC argument was that cartels were principally wrong and that the EEC utility was more important than the potential general utility. Since Sweden did not have the upper hand in the discussions the outcome became that the Scandinavian export cartels were formally dismantled and free trade for paper products had to wait for 11 years. When it comes to the actual effects, Swedish paper export could continue in much the same way as before. A process initiated by EC against the Scandinavian newspaper cartels ended up in a compromise founded on a common skepticism towards North American producers. [ABSTRACT FROM AUTHOR]

We analyze the total factor productivity (TFP) of the pulp and paper industry in three Canadian provinces (British Columbia, Ontario, and Quebec) and in three United States (US) states that are contiguously located south of the border (Washington, Illinois, and Maine) over the period of 1971 to 2005. We find that the industry in the three Canadian provinces had much higher TFP growth rates in the era following the Free-Trade Agreement (FTA) signed in 1988. In terms of productivity level, this relative TFP surge allowed the industry in Ontario and British Columbia to move ahead of Illinois and Washington, respectively; however, Quebec trailed further Maine, which is the overall leader in the sample. Our results in this particular case reveal that the Canadian pulp and paper industry did not contribute to the overall Canada-US productivity gap. [ABSTRACT FROM AUTHOR]

For fifty years, the General Agreement on Tariffs and Trade (GATT) system has fostered the development of liberal multilateralism. Originally a short, fifty-page set of rules that governed trade between just twenty-three Contracting Parties, and applying only provisionally because of the failure of several countries to ratify it, the GATT system has evolved into one of the world's most well-developed international organizations. The GATT’s organizational successor, the World Trade Organization (WTO), boasts over 130 members that have ratified its founding charter and thousands of pages of substantive rules. Perhaps most significantly, the Uruguay Round negotiations bestowed upon the GATT/WTO system revised rules of government, which some have predicted will vastly improve the regime's institutional strength. With new dispute settlement rules, clarified rules of procedure for decision-making by the Members, and the formal establishment of a genuine secretariat, many claim that the world's preeminent trade institution is stronger than ever. Their hope is that this revitalized institution can govern itself effectively, advancing international political order and rules-based liberal multilateralism.This paper considers the possible effects of China’s accession to the WTO on the WTO’s institutional strength—how China’s accession could affect WTO governmental processes and the extent of political support for the organization from leading Western trading countries. During the past ten years, in which China has (of course) not been a GATT Contracting Party or a WTO Member, there has been substantial “systems friction” between China and some Western trading countries. The term “systems friction,” coined by Sylvia Ostry , is usually thought of as political tension between countries attributable to their economic interaction in the context of fundamental differences in the organization and operating principles of their respective political-economic structures. There may be different forms of systems friction, depending on whether the interacting political-economic structures can change, how willing countries are to change political-economic structures in order to accommodate other players, and whether the structures simply have not yet been subject to negotia-tion. The systems friction now associated with China-trade embodies elements of all three forms. This raises the question of whether WTO accession for China is likely to reduce and contain the systems friction, or weaken the WTO as an institution, or both.