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The liberalization of agricultural trade in the Asia-Pacific region is important to the relatively efficient, low-cost exporters of farm commodities that are participating in the APEC process. While the Uruguay Round negotiations succeeded, for the first time, in extending the GATT trade liberalizing process to agriculture, the agreement was modest. Japan and Korea were allowed more time in which to prepare for the opening of their markets. But the farm-support policies of both are destroying their agricultures. The sooner they are changed, as those of Taiwan have been changed, the better it will be for the Japanese and Korean economies - for consumers, public finances, land prices, and the farmers who remain.

At APEC's second 'summit' meeting, in November 1994, President Suharto of Indonesia steered the leaders of the eighteen member countries, or territories, to accept the vision of 'free trade in the region' by 2020, with the developed economies achieving the goal by 2010. Six months later, Indonesia introduced a package of liberalization measures that combined its commitments in ASEAN, the Uruguay Round agreements, and the APEC process. It has hoped thereby to show others what might be done to achieve 'the Bogor goals.'

Too often, heterodox critics argue against generalized free trade on the basis of (1) the existence of rigidities, (2) the negative impact on an economic subgroup-like particular industries or workers, [...]

Using input output data for 1987 and 1990, this study identified those groups of service sector workers most vulnerable to trade-related employment displacements. Relative to other industry groups, workers (both black and white) in service industries which experienced an increase in (positive) net trade-related employment, were more likely to be male, elderly (over 65 years of age), less educated (high school graduates) and unskilled (laborers). In contrast, service industries which suffered a decline in (positive) net trade-related employment between 1987 and 1990, were relatively more skill-intensive (as measured by the share of college educated workers, scientists, engineers and managers in the labor force), and more likely to employ women, married couples and individuals in the 25 to 35 age bracket. Union members on the other hand, were overrepresented in service industries which suffered net trade-related employment losses in 1987 and 1990. The latter industries, however, experienced an improvement over the period.

The Global Trade Analysis Project global economy model was used to analyze how East Asia's fast growth rate affects the factor markets of developed nations. The model compares the region with economies that have adopted technology to reduce labor requirements. Biased technological advancements were found to be the primary stimulants of changing wage structures, while trade was shown to have a strong effect on agriculture. The agricultural sector stands to lose more if it opposes protectionism.

The Canada-United States Free Trade Agreement (FTA) provides an excellent opportunity to analyze the impact of a comprehensive trade liberalization. In this paper, a stock market event study is employed to capture investors' expectations about the consequences of this agreement for manufacturing firms in Canada. The primary question addressed is whether abnormal stock market returns corresponding to news about the FTA are consistent with hypotheses based on comparative advantage and economies of scale. The results indicate that both comparative advantage and scale economies played a role in determining investors' perceptions of the impact of the FTA. Key words: Free trade; Stock market prices

FOLLOWING the intense debate and ultimate passage of the North American Free Trade Agreement (NAFTA), it has now emerged that the question of globalized free trade has become one of […]

Poland, Czechoslovakia and Hungary signed Association Agreements with the EC in 1992. Simulation results show that these agreements have the potential of increasing the export revenues of the three East European countries by eight to 12 percent, thus giving them an opportunity to reduce their 1991 debt obligations by 10% to 15%. However, the EC's enactment of protectionist measures against the three countries derails the opportunities for growth provided to them by the Association Agreements.

The search for an effective strategy of labor solidarity in the context of the North American Free Trade Agreement involves more than a denunciation of violations of the rights of workers. It requires support for an alternative strategy of economic progress based on defending and strengthening the productive capabilities of workers and peasants to supply their own needs, and those of their communities. Economic integration in North America requires collaboration to promote broad-based development, social justice and a clean environment.

The countries belonging to the ASEAN have adopted the ASEAN Free Trade Area (AFTA) to solve the problem of severe economic disintegration. The AFTA will help enhance the demand for goods and will create market for the goods. AFTA is also considering the need to restore the environment which is fast degrading due to the increase in industrialization.

An econometric analysis of the economic factors associated with the voting trend on fast track authority within each house of Congress reveals a strong evidence of expected effects for the factoral distribution of income. The analysis indicated a perception that the extension of fast-track authority would mean a reduction in the economic welfare of low-wage workers versus high-wage workers throughout the entire economy.

Will a North American Free Trade Agreement (NAFTA) decrease Mexican migration to the United States, as the U.S. and Mexican governments assert, or increase migration beyond the movement that would otherwise occur, as NAFTA critics allege? This article argues that it is easy to overestimate the additional emigration from rural Mexico owing to NAFTA-related economic restructuring in Mexico. The available evidence suggests four major reasons why Mexican emigration may not increase massively, despite extensive restructuring and displacement from traditional agriculture. First, many rural dwellers in Mexico already have diversified their sources of income, making them less dependent on income earned from producing agricultural commodities like corn that will be most affected by NAFTA. Second, a free trade zone might induce more U.S. agricultural producers to expand in Mexico during the 1990s, creating additional jobs there instead of in the United States. Third, the links between internal migration in Mexico and emigration from Mexico are not as direct as is often assumed; even if economic restructuring increases internal population movements in Mexico, this may not translate into a great deal of international emigration. Finally, European experience teaches that free trade and economic integration can be phased-in in a manner which does not produce significant emigration, even under a freedom of movement regime. NAFTA-related economic displacement in Mexico may yield an initial wave of migration to test the U.S. labor market, but this migration should soon diminish if the jobs that these migrants seek shift to Mexico., The February 1991 announcement that Canada, Mexico and the United States would negotiate a North American Free Trade Agreement (NAFTA) raised a chorus of speculations about the effects of a [...]

Trade liberalisation is a major concern strongly endorsed by international organizations such as the IMF and the World Bank. But some factions do not support an outward-oriented economic policy because it is believed to cause stagnation of local businesses in the host country. Nonetheless, it is generally believed that the promotion of free trade is healthy for a developing country and the global economy as well.

The economic and psychic costs to the US of antidumping and protectionist trade policies exceed the benefits when the economic interests of consumers are factored into the analysis. Justifications for protectionism that focus on job loss, infant industry support and fair trade fail to consider the tremendous welfare loss that consumers must bear for these policies. Protectionism also slows the reallocation of US resources to more efficient growth industries. Policies of immediate free trade with Europe and other international markets are the only efficient solution.

This paper attempts to generalise the Young-Miyagiwa results for an economy with a free trade zone and Harris-Todaro unemployment by incorporating intersectoral mobility of domestic capital and an upward sloping supply function of foreign capital. Our analysis reveals, that under reasonable assumptions, creating a free trade zone may lead to a loss in national welfare. Further, there may arise a conflict between the twin objectives of increasing employment and increasing national welfare.

Traditional positive analysis of preferential trading areas has focused on the trade-offs between (beneficial) trade creation and (potentially harmful) trade diversion. We consider the latter phenomenon in the formation of a free-trade area (FTA) between countries where tariffs against non-members are set endogenously. We show that such tariffs will fall consequent to the formation of FTAs and trade diversion is likely to become trade creation. This is illustrated in a model in which tariffs are levied to maximize a political support function. We conclude with some comments on the generality of this result and directions for future research.

The structural stability of Korea's import demand is examined using the elasticity approach. The analysis of quarterly data for the years 1971-1988 indicates one, or possibly two, structural breaks. This structural break is linked to the import liberalization measures adopted by Korea's government in the early 1980s. New estimation results, after the structural break is considered, show that the income and the price elasticities are more responsive over time.

If the prospective North American Free Trade Area can be extended to the rest of Latin America and the Caribbean, the United States will gain from increased exports and employment in about the same dimensions as the benefits of free trade with Mexico alone. Ironically, however, the United States should want Latin America to keep its tariffs toward the rest of world low, so that the inefficiency of too sweet a deal for the United States does not create a drag on Latin America's growth. In the long run, the United States earns more from rapidly growing Latin American economies than it would from an oversized margin of preference for U.S. goods in a regional free trade area. The grand Enterprise for the Americas strategy can be successful for the United States and Latin America if it helps consolidate Latin America's historic economic reforms, including its opening to global competition.

The promotion of free trade and market-oriented reform in Mexico has turned the country from a paragon of nationalism and inward development to a vendor of low-wage labor. The low-wage policy being pursued by Mexican authorities to make the country attractive to transnational capital has resulted in the decline of labor's share of the national income from 43% to 35% between 1980 and 1987. The new economic strategy has only allegedly aggravated inequality and human suffering.

Latin America's plan for trade liberalization will largely depend on privatizing financial markets prior to making trade policy. Deregulating the financial environment will produce the necessary gains in capital market efficiency which are requisite for regional economic growth. Capital flows in Latin America will stagnate and result in debt crisis unless liberalization occurs.

Urban and rural areas are compared as appropriate locations for a free-trade zone within a developing country suffering from urban unemployment. If domestic capital is mobile between the two regions, then the rural area is shown to be preferable to the urban area, and sufficient conditions for this conclusion are presented. This conclusion may be reversed, however, if capital is sector-specific. The condition for this reversal is also discussed.

The US must decide whether to support foreign direct investment in America. FDI increased dramatically between 1980, when its total market value was $83 billion, and 1991, when market value totaled over $407 billion. FDI decreased the market shares of US-owned companies, and it could possibly threaten economic and military security in the long run. The US must adopt a limited tariff-based protectionist policy that includes the entire manufacturing industry.

After a century of warfare England and France concluded a free trade treaty in 1786 in which tariff reductions greatly increased the volume of commerce between them. The French government had been eager to conclude an agreement because it hoped that England's wealth would help stabilize its royal finances. The treaty ultimately hurt the French balance of trade and textile industry because the English were better prepared to exploit market opportunities.

The North American Free Trade Agreement (NAFTA) will adversely affect the economic welfare of both Americans and Mexicans. The NAFTA will cause the transfer of US investments to Mexico by much as $53 billion by the year 2000, resulting in the permanent loss of US jobs. On the Mexican side, cheaper US and Canadian corn will cause the closure of small, inefficient corn farms. As a result, Mexican illegal migration to the US is expected to increase. On the macroeconomic level, the NAFTA will divert income distribution from wages to profit, benefitting mainly the owners of capital.

The North American Free Trade Agreement (NAFTA) will not improve the economic and social well-being of US and Mexican workers. The NAFTA will accelerate the transfer of US firms to Mexico due to the country's lower wages, resulting in job losses and declining wages for US workers. Mexico's environmental problems will increase due to its inability to enforce environmental regulations. It was suggested that the EC offers a better system of economic integration. The EC has substantial 'social funds' designed to compensate or assist workers displaced by free trade arrangements.

The incentives for agricultural protectionism are analyzed by constructing a model where subsidy is excludable and rivalrous. Agricultural policies in developed countries are marked by protectionism through trade restrictions and direct price supports while less-developed countries impose export taxes on agricultural products. Analysis of data from 18 developing nations indicate that export taxes were imposed proportionately to agricultural productivity. The study indicates that economic self-interest is partially responsible for agricultural protectionism.

The isolation provided by its geography prompted the creation in Australia of one of the world's most protected manufacturing sectors and centralized systems of wage determinations. Unlike other countries pursuing protectionist policies, Australia possessed abundant natural resources which enabled it to experience growth in GNP export share and real income. It was found out, however, that microeconomic flexibility tend to be ignored in this system. In the future, Australia is expected to use a set of policy instruments which are more clearly focused on social goals rather than on tariffs and imports.

The failure of the North American Free Trade Agreement (NAFTA) will have no economically significant effect on Mexico. However, given its situation wherein it is still recovering from the frightful experience of a debt crisis, a setback could have psychological effects. An assessment of the possible implications of a NAFTA deferral is made in terms of its symbolic importance. A more important issue in this regard is the issue of who the successor of Mexico's current president will be, as he will be the one to maintain the current free market reforms.

A free-trade agreement between the US and Mexico could lead to dramatic changes in the economies of both nations. The North American Free Trade Agreement (NAFTA) would allow the US to become more competitive by allowing US companies to combine high-skilled American workers with low-cost Mexican labor. Mexico would improve both its economic and its political systems under a free-trade agreement. NAFTA will not be successful unless the US first provides its own labor force with the appropriate skills.

Analysis of the customs union as a trade agreement supports the proposition that such an arrangement may not be dismissed as necessarily inefficient. A comprehensive study of the propositions and counter-propositions made by free trade advocates and protectionists alike from the fifties to the present indicates that unilateral tariff reductions are not necessarily superior to customs unions. The latter has the advantage of tariffs or transportation costs that provide a price differential not found in the former case.