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How high were import tariffs when GATT participants began negotiations to reduce them in 1947? Establishing this starting point is key to determining how successful the GATT has been in bringing down trade barriers. If the average tariff level was about 40 percent, as commonly reported, the implied early tariff reductions were substantial, but this number has never been verified. This paper examines the evidence on tariff levels in the late 1940s and early 1950s and finds that the average tariff level going into the first Geneva Round of 1947 was about 22 percent. It also find that tariffs fell by relatively more in the late 1940s and early 1950s for a core group of GATT participants (the United States, United Kingdom, Canada and Australia) than they did for many other important countries, including the set of other (non-core) GATT participants.

What affects a country's decision of whether to formally engage in a trade dispute directly related to its exporting interests? This article empirically examines determinants of affected country participation decisions in formal trade litigation arising under the World Trade Organization (WTO) between 1995 and 2000. It investigates determinants of nonparticipation and examines whether the incentives generated by the system's rules and procedures discourage active engagement in dispute settlement by developing country members in particular. Though the size of exports at stake is found to be an important economic determinant affecting the decision to participate in challenges to a WTO-inconsistent policy, the evidence also shows that measures of a country's retaliatory and legal capacity as well as its international political economy relationships matter. These results are consistent with the hypothesis of an implicit 'institutional bias' generated by the system's rules and incentives that particularly affects developing economy participation in dispute settlement.

Industry affiliation provides an important channel through which trade liberalization can affect worker earnings and wage inequality between skilled and unskilled workers. This empirical study of the impact of the 1988-94 trade liberalization in Brazil on the industry wage structure suggests that although industry affiliation is an important component of worker earnings, the structure of industry wage premiums is relatively stable over time. There is no statistical association between changes in industry wage premiums and changes in trade policy or between industry-specific skill premiums to university graduates and trade policy. Thus trade liberalization in Brazil did not significantly contribute to increased wage inequality between skilled and unskilled workers through changes in industry wage premiums. The difference between these results and those obtained for other countries (such as Colombia and Mexico) provides fruitful ground for studying the conditions under which trade reforms do not have an adverse effect on industry wage differentials

The proliferation of preferential trade liberalization over the last 20 years has raised the question of whether it slows multilateral trade liberalization. Recent theoretical and empirical evidence indicates that this is the case even for unilateral preferences that developed countries provide to small and poor countries, but there is no estimate of the resulting welfare costs. This stumbling block effect can be avoided by replacing the unilateral preferences with a fixed import subsidy, which generates a Pareto improvement. More importantly, this paper presents the first estimates of the welfare cost of preferential liberalization as a stumbling block to multilateral liberalization. Recent estimates of the stumbling block effect of preferences with data for 170 countries and more than 5,000 products are used to calculate the welfare effects of the European Union, Japan, and the United States switching from unilateral preferences for least developed countries to an import subsidy scheme. In a model with no dynamic gains to trade, the switch produces an annual net welfare gain for the 170 countries that adds about 10 percent to the estimated trade liberalization gains in the Doha Round. It also generates gains for each group: the European Union, Japan, and the United States ($2,934 million), least developed countries ($520 million), and the rest of the world ($900 million).

The effective market access granted to textiles and apparel under the North American Free Trade Agreement (NAFTA) is estimated, taking into account the presence of rules of origin. First, estimates are provided of the effect of tariff preferences combined with rules of origin on the border prices of Mexican final goods exported to the United States (U.S.) and of U.S. intermediate goods exported to Mexico, based on eight-digit harmonized system tariff-line data. A third of the estimated rise in the border price of Mexican apparel products is found to compensate for the cost of complying with NAFTA's rules of origin, and NAFTA is found to have raised the price of U.S. intermediate goods exported to Mexico by around 12 percent, with downstream rules of origin accounting for a third of that increase. Second, simulations are used to estimate welfare gains for Mexican exporters from preferential market access under NAFTA. The presence of rules of origin is found to approximately halve these gains.

This article presents estimates of the impact of China's accession to the World Trade Organization (WTO). China is estimated to be the biggest beneficiary (US$31 billion a year from trade reforms in preparation for accession and additional gains of $10 billion a year from reforms after accession), followed by its major trading partners that also undertake liberalization, including the economies in North America, Western Europe, and Taiwan (China). Accession will boost manufacturing sectors in China, especially textiles and apparel, which will benefit directly from the removal of export quotas. Developing economies competing with China in third markets may suffer small losses. Accession will have important distributional consequences for China, with the wages of skilled and unskilled nonfarm workers rising in real terms and relative to those of farm workers. Possible policy changes, including reductions in barriers to labor mobility and improvements in rural education, could more than offset these negative impacts and facilitate the development of China's economy.

This article analyzes the relationship between trade facilitation and trade flows in the Asia Pacific region. Country specific data for port efficiency, customs environment, regulatory environment, and e-business usage are used to construct indicators for measuring trade facilitation. The relationship between these indicators and trade flows is estimated using a gravity model that includes tariffs and other standard variables. Enhanced port efficiency has a large and positive effect on trade flows. Regulatory barriers deter trade. Improvements in customs and greater e-business use significantly expand trade but to a lesser degree than improvements in ports or regulations. The benefits of specific trade facilitation efforts are estimated by quantifying differential improvements in these four areas among members of the Asia Pacific Economic Cooperation (APEC). A scenario in which APEC members with below-average indicators improve capacity halfway to the average forall members shows that intra-APEC trade could increase by Dollar 254 billion, or 21 percent of intra-APEC trade flows.