These included: ‘voluntary’ export restraints against successful foreign exporters (e.g., Japanese car companies); quotas on textile and clothing imports (through the Multi-Fibre Agreement); agricultural subsidies (compare this with the repeal of the Corn Laws in Britain); and anti-dumping duties (where ‘dumping’ is defined by the US government in a way that is biased against foreign companies, as repeated WTO rulings have shown).
42
For further details on the other countries dealt with in this chapter, see Chang (2002), chapter 2, pp. 32–51 and H-J. Chang (2005),
43
See the evidence presented in Nye (1991).
44
The average industrial tariff rates were 14% in Belgium (1959), 18% in Japan (1962) and Italy (1959), around 20% in Austria and Finland (1962) and 30% in France (1959). See Chang (2005), Table 5.
45
Chang (2005), Table 5. In 1973, the EEC countries included Belgium, Denmark, France, Italy, Luxemburg, the Netherlands, UK and West Germany.
46
R. Kuisel (1981),
47
Irwin (2002) is an example.
48
In their celebrated article cited in chapter 1, Jeffrey Sachs and Andrew Warner discusses how ‘wrong’ theories have influenced developing countries to adopt ‘wrong’ policies. J. Sachs & A. Warner (1995), ‘Economic Reform and the Process of Global Integration’,
49
When the Cancun talk of the WTO collapsed, Willem Buiter, the distinguished Dutch economist who was then the chief economist of the EBRD (European Bank for Reconstruction and Development) argued: ‘Although the leaders of the developing nations rule countries that are, on average, poor or very poor, it does not follow that these leaders necessarily speak on behalf of the poor and poorest in their countries. Some do; others represent corrupt and repressive elites that feed off the rents created by imposing barriers to trade and other distortions, at the expense of their poorest and most defenceless citizens’. See Willem Buiter, ‘If anything is rescued from Cancun, politics must take precedence over economics’, letter to the editor,
50
The growth rates in this paragraph are from A. Maddison (2003),
*
The South Sea Company was set up in 1711 by Robert Harley, Defoe’s first spymaster, and was granted exclusive trading rights in Spanish South America. It made little actual profit, but talked up its stock with the most extravagant rumours of the value of its potential trade. A speculative frenzy developed around its shares in 1720, with its stock price rising by ten times in seven months between January and August 1720. The stock price then started falling and, by early 1721, was back where it had been in January 1720.
*
This is a practice where a manufacturer exporting a product is paid back the tariff that it has paid for the imported inputs used in producing the product. This is a way of encouraging exports.
†
This is a practice where the government sets the minimum quality standards for export products and punishes those exporters who do not meet them. This is intended to prevent substandard export products tarnishing the image of the exporting country. It is particularly useful when products do not have well-recognized brand names and, therefore, are identified by their national origin.
*
However, Smith was a patriot even more than he was a free market economist. He supported free market and free trade only because he thought they were good for Britain, as we can see from his praise of the Navigation Acts – the most blatant kind of ‘market-distorting’ regulation – as ‘the wisest of all the commercial regulations of England’.
*
The average tariff rate, of course, does not tell us the full story. A country may have a relatively low average tariff rate, but this could be the result of the heavy protection of certain sectors counterbalanced by very low or zero tariffs in other sectors. For example, during the late 19th and the early 20th century, while maintaining a relatively moderate
*
The Marshall Plan was announced by George Marshall, the then US secretary of state, in his address at
