Contents -- Preface and Acknowledgments -- Contributors -- 1. Introduction and Overview Robert M. Stern -- I. Introduction -- II. Overview -- Part I. Globalization -- 2. What the Public Should Know about Globalization and the World Trade Organization Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. Globalization -- What Is It? -- Whom Does It Help and Whom Does It Hurt? -- Dynamic Effects of Trade -- Effects of International Capital Flows -- Other Effects of Globalization -- What Should be Done about Globalization? -- III. The WTO -- What Is It? -- Whom Does It Help and Whom Does It Hurt? -- Other Objections to the WTO -- What Happened in Seattle? -- What to Do? -- IV. Conclusion -- On Globalization: -- On the WTO: -- On Seattle: -- Study Questions -- References -- Suggested Further Reading -- 3. Globalization's Bystanders: Does Trade Liberalization Hurt Countries That Do Not Participate? Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. When Can a Country Free Ride? -- III. Which Tariffs Will Fall with Multilateral Liberalization? -- IV. Preferential Trade Liberalization -- V. Conclusion -- Study Questions -- References -- Suggested Further Reading -- 4. Global Market Integration and National Sovereignty Andrew G. Brown and Robert M. Stern -- I. Introduction -- II. The Global Trading System: Yesterday and Today -- The New Era of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) -- Reciprocity and the Changing Character of Trade Negotiations -- III. Non-Discrimination and Free Trade Arrangements -- The Systemic Effects of FTAs -- IV. Establishing the Boundaries of the WTO -- The Boundaries to the WTO Regime -- Economic Nationalism -- Domestic Subsidies and Industrial Policies -- TRIMS and TRIPS -- Government Procurement -- Markets and Institutions -- Competition Policy.

Labor Standards -- Environmental Standards -- Health and Safety Standards and Consumer Protection -- The Playing Field -- Free Trade Agreements -- V. Conclusion -- Study Questions -- References -- Suggested Further Reading -- 5. Concepts of Fairness in the Global Trading System Andrew G. Brown and Robert M. Stern -- I. Introduction -- II. The Efficiency Criterion -- III. Equality of Opportunity and Market Access -- Reciprocity -- Initial Conditions -- IV. Distributive Equity and Market Access -- V. Equality of Opportunity in Supporting Rules -- Developed Countries -- Developing Countries -- VI. Procedural Justice -- VII. Fairness and the Doha Round -- Stiglitz and Charlton Principles of Fairness -- Achieving Equality of Opportunity and Distributive Equity in the Doha Round -- VIII. Conclusion -- Study Questions -- References -- Suggested Further Reading -- Part II. Analysis of Multilateral, Regional, and Bilateral Trading Arrangements -- 6. Multilateral Trade Negotiations and Preferential Trading Arrangements Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. The Principles of GATT2 -- III. A Brief History of GATT Negotiating Rounds4 -- IV. Preferential Trading Arrangements and the GATT GATT Article XXIV -- Characteristics and Consequences of Preferential Arrangements -- V. The Advantages and Limitations of Multilateralism and Preferential Arrangements14 -- The Case for Multilateralism -- Role and Authority of the GATT in a Changing World Economy -- Criticisms of Multilateralism and Advantages of Preferential Arrangements -- Criticisms of Preferential Trading Arrangements -- VI. Theoretical Analysis of the Welfare Effects of the Expansion of Trading Blocs -- The Krugman Argument -- A Comparative Advantage Approach -- A Four-Country Example -- A Six-Country Example -- A Many-Country Case -- Tariffs -- Extensions and Caveats.

VII. Implications for the Design of Trading Blocs to Enhance World Welfare -- Appendix -- GENERAL AGREEMENT ON TARIFFS AND TRADE Article XXIV -- Study Questions -- References -- Suggested Further Reading -- 7. An Overview of the Modeling of the Choices and Consequences of U.S. Trade Policies Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. Issues of Policy Design and Choice -- The Normative Approach to Policy Making -- The Political Economy Approach to Policy Making -- The Transaction-Cost Approach to Policy Making -- Empirical Evidence -- The Normative Approach -- The Political Economy Approach -- III. Representation of Constituent Interests -- Structure of the U.S. Trade-Policy Process -- Modeling U.S. Trade Policies -- Normative Approach -- Political Economy Approach -- The Transaction-Cost Approach -- What Can Be Learned from the U.S. Trade-Policy Experiences in the Fifty Years Since World War II? -- IV. Conclusions and Implications for Research and Policy -- Study Questions -- References -- Suggested Further Reading -- 8. Issues of Manufactures Liberalization and Administered Protection in the Doha Round Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. Market Access -- III. Implementation -- IV. Administered Protection -- V. Preferential Arrangements -- VI. Dispute Resolution -- VII. Special Treatment -- VIII. Conclusion -- Study Questions -- References -- Suggested Further Reading -- 9. An Assessment of the Economic Effects of the Menu of U.S. Trade Policies Kozo Kiyota and Robert M. Stern -- I. Introduction -- II. The Michigan Model of World Production and Trade -- Overview of the Michigan Model -- Interpreting the Modeling Results -- Benchmark Data -- III. Computational Analysis of U.S. Free Trade Agreements -- IV. Hub and Spoke Effects of the U.S. FTAs.

V. Welfare Effects of Unilateral Free Trade and Global Free Trade -- VI. Summary and Conclusions -- Study Questions -- References -- Suggested Further Reading -- 10. Trade Diversion Under NAFTA Kyoji Fukao, Toshihiro Okubo and Robert M. Stern -- I. Introduction -- II. NAFTA in Context and a Review of the Literature -- III. Conceptual Framework and Empirical Implementation -- The Model -- Empirical Implementation -- IV. Empirical Results -- V. Conclusions and Implications for Further Research -- Appendix. Partial-Equilibrium Trade Model of Differentiated-Product Industries under Monopolistic Competition with N Countries -- Study Questions -- References -- Suggested Further Reading -- 11. Some Economic Effects of the Free Trade Agreement between Tunisia and the European Union Drusilla K. Brown, Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. The Michigan BDS CGE Trade Model1 -- Some Essential Model Features -- Policy Input Data -- III. The Determinants of Foreign Direct Investment -- IV. Tunisia's 1994 Investment Code19 -- V. Model Scenarios -- VI. Computational Results: Aggregate Effects -- Scenario A -- Scenario B -- Scenario C -- Scenario D -- Scenario E -- VII. Computational Results: Sectoral Effects -- Scenario A -- Scenario B -- Scenario C -- Scenario D -- Scenario E -- Policies for Adjustment -- VIII. Conclusions and Implications for Policy -- Study Questions -- References -- Suggested Further Reading -- 12. A North American Free Trade Agreement: Analytical Issues and a Computational Assessment Drusilla K. Brown, Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. Issues in Analyzing the Economic Impact of the NAFTA -- III. The Computational Model -- IV. Computational Results -- V. Conclusions -- Study Questions -- References -- Suggested Further Reading.

13. Computable General Equilibrium Estimates of the Gains from US-Canadian Trade Liberalization Drusilla K. Brown and Robert M. Stern -- I. Introduction -- II. Analyzing the Economic Impacts of the FTA -- Inter-Sectoral Specialization -- Rationalization Effects -- Macroeconomic Effects -- Reduction in the Uncertainty of Policies -- III. What Do Previous Studies Suggest about the Effects of the FTA? -- IV. The Computational Model -- Computational Results -- V. Summary Assessment of the FTA -- Appendix -- Study Questions -- References and Further Reading -- Suggested Further Reading -- 14. The Effects of the Tokyo Round on the Structure of Protection Alan V. Deardorff and Robert M. Stern -- I. Description of the Model -- II. Conceptual Framework -- Exogeneity of Tariff-Exclusive Prices -- Exogeneity of Exchange Rates -- Exogeneity of Foreign Tariffs -- Traded versus Nontraded Goods -- III. Data -- IV. Results -- Alternative Measures of CPVA -- Explanations of the Pattern of Changes in Tariffs and Protection -- Indicators of Resource Pull Effects of Protection -- Further Comparison of the Pre- and Post-Tokyo Round Structure of Protection -- The Terms of Trade of the Major Developing Countries -- V. Conclusion -- Appendix. Equations of the Model -- Country System Equations -- World System Equations -- Explanation of Functions and Regimes -- Functional Forms -- Study Questions -- References -- Suggested Further Reading -- Part III. Services Trade -- 15. Empirical Analysis of Barriers to International Services Transactions and the Consequences of Liberalization Alan V. Deardorff and Robert M. Stern -- I. Introduction -- II. Conceptual Framework -- III. Characteristics of Services Barriers -- IV. Methods of Measurement of Services Barriers -- Frequency Studies and Indexes of Restrictiveness -- PECC and Hoekman -- Hardin and Holmes -- McGuire and Schuele.

Price-Impact Measurements15.