The World Trade Organization

ФЕДЕРАЛЬНОЕ АГЕНТСТВО ПО ОБРАЗОВАНИЮ 

СТАВРОПОЛЬСКИЙ  ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ

Экономический факультет 
 
 
 
 
 
 
 
 
 

КУРСОВАЯ РАБОТА

на тему: «The World Trade Organization»

(www.wto.org) 
 
 
 
 
 
 

Выполнила: студентка 4 курса ЭФ

специальности «мировая экономика» группы А

Безладная Виктория Дмитриевна 
 
 
 

Научный руководитель:

к.п.н., доцент Симонова Н.А. 
 
 
 
 
 
 
 
 
 
 

Ставрополь 2009 

Содержание

1. Стиль текста 3

1. Характер  текста 3

1. Лексическая характеристика 4

2. Грамматический  уровень 4

3. Синтаксический  уровень 4

2. Способы перевода 5

1. Сокращенный способ 5

1. Выборочный  перевод 5

2. Функциональный  перевод 6

2. Полный  перевод 6

1. Буквальный  перевод 6

2. Семантический перевод 6

3. Переводческие трансформации 7

1. Грамматические  трансформации 7

2. Стилистические  трансформации 7

4. Исходный  текст 8

5. Текст перевода 38

     1 Стиль текста

     1.1 Характер официально-делового текста

     Современный литературный язык характеризуется  определенными нормами в орфоэпии, лексике, грамматике и стилистике. Языковые нормы являются обязательными. Единство литературного языка создается благодаря общелитературным, или межстилевым, средствам, которые могут употребляться в разных языковых стилях. Стилистически нейтральная лексика не имеет особого выражения, а стилистически окрашенная лексика – наоборот, имеет (разговорное, просторечное, специальное, книжное и.т.п.) В свою очередь, язык подразделяется на функциональные стили. В зависимости от задач речи стили делятся на разговорный и книжный (научный, официально-деловой, публицистический, стиль научной литературы).

     Приведенный ниже текст написан в официально-деловом стиле. Официально-деловой стиль – функциональный стиль речи, среда речевого общения в сфере официальных отношений, в сфере правовых отношений и управления. Эта сфера охватывает международные отношения, к данной сфере и относится данный текст, он отражает все стороны, регламентирующие деятельность основной международной торговой организации, Всемирной торговой организации (ВТО). Среди других функциональных стилей, официально-деловой отличается относительной устойчивостью, в целом он имеет консервативный характер. Его одна из главных черт – наличие фраз – клише. Основной сферой функционирования официально-делового стиля, является административно-правовая сфера. В данном тексте говорится о системе ВТО. Текст отличается наличием названий экономического характера (Bretton Woods Conference, International Monetary Fund, General Agreement on Tariffs and Trade), фраз – клише (TRIMS, TPIPS, most-favored nation, customs duty), невыразительностью речи. Кроме того, текст написан с целью ознакомления читателя с организацией и ее функционированием. 

     1.1.1 Лексическая характеристика

     Данный текст характерен нейтральной лексикой (economy, international, trade, organization), специальными терминами (international economic cooperation, stimulate economic growth, benefit), так как он является международным официальным документом.

     1.1.2 Грамматический уровень

     Грамматические особенности текста - это причастия, деепричастия, отглагольные существительные (incoming, determined, selling, established). Часто используются существительные в форме единственного числа в значении множественного (nation, which incoming in the WTO, member of the WTO etc). 

     1.1.3 Синтаксический уровень

     Наиболее часто в тексте используется прямой порядок слов в предложении. В односоставных предложениях преобладают глагольные формы множественного числа, используются слова состояния (obviously, however и др.), предположим, рассмотрим и т. д. В основном используются сложные конструкции (Therefore, both Bhagwati and Arvind Panagariya of Columbia University have criticized the introduction of TRIP’s into the WTO framework, fearing that such non-trade agendas might overwhelm the organization's function, The Third World Network has called the WTO "the most non-transparent of international organizations", because "the vast majority of developing countries have very little real say in the WTO system"). Текст характеризуется точностью, строгой логичностью, четкостью изложения. Полностью отсутствует образность и эмоциональность речи.

      2 Способы перевода

     Выполняя   перевод,  переводчик определяет способ  перевода, меру информационной упорядоченности для переводимого текста. Первая ступень в выборе способа упорядоченности заключается в определении того, в каком  виде должен быть  представлен текст перевода в переводческой культуре:   полностью или частично.  В зависимости от  коммуникативного задания выбираются полный или сокращенный (реферативный перевод). 

     2.1. Сокращенный способ

     Сокращенному переводу могут подлежать практически все формы текстов – от простого делового письма до романа. Результатом применения сокращенного перевода являются такие тексты, как: тезисы, конспекты, рефераты, аннотации, приложения. Всякий раз размеры такого текста и его образ зависят от способа, который выбирается переводчиком для достижения цели. В сущности, сокращенный перевод выполняется одним из двух способов: выборочный и функциональный перевод. 

     2.1.1 Выборочный перевод

       Выборочный перевод – состоит в выборе ключевых единиц исходного текста и их полном переводе. Все остальные компоненты текста отбрасываются   и   не   подлежат   переводу   вообще.  Такой  способ   перевода довольно часто применяется для пересказа в тезисно-реферативной форме научных статей, докладов и.т.д. Достоверность такого перевода основывается на точности выбора ключевых единиц, чтобы в переводе не пропала какая-либо важная часть исходной информации.

     Например: «The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time. – Соглашение ВТО по торговым аспектам защиты интеллектуальной собственности заключено в 1986-94 гг. в начале Уругвайского раунда». 

     2.1.2 Функциональный перевод

     Функциональный  перевод - компонование переводимого текста и функционально-преобразованных единиц исходного текста. Может существовать лексическая, грамматическая и стилистическая трансформация исходного   текста,   применяемая   в   целях   его   общего   сокращения. В тексте наиболее часто применяются лексические трансформации исходного текста (транслитерация в сочетании с транскрипцией «TRIMS, TRIPS, Bretton Woods system»). 

     2.2 Полный перевод

     2.2.1 Буквальный перевод

     Буквальный  перевод – воспроизведение в  переводном тексте формальных и семантических  компонентов исходного текста. В результате буквального перевода нарушаются нормы и узус языка перевода, оказывается искаженным или непереданным действительное содержание оригинала.

     Например: «Harry Dexter White and John Maynard Keynes at the Bretton Woods Conference – both economists had been strong advocates of a liberal international trade environment, and recommended the establishment of three institutions…» Герри Декстер Вайт и Джон Мейнард Кейнс на Бреттон-Вуддской конференции оба экономиста строго защищали свободу международной торговой среды и рекомендовали основать три института… 

     2.2.2 Семантический перевод

     Семантический перевод – перевод текста, как  целого, с учетом смысла каждой единицы, входящей в него. Например «Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade» - если страны используют выраженные торговые барьеры, имеют желание их снизить, переговоры помогают либерализировать торговлю. 

     3 Переводческие трансформации

     3.1 Грамматические трансформации

      Грамматическая трансформация – прием перевода, заключающийся в изменении структуры предложения или словосочетания при сохранении семантической информации (The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. Всемирная торговая организация (ВТО) является единственной глобальной международной организацией, регулирующей правила торговли между нациями). 

      3.2 Стилистические трансформации

      Стилистические  трансформации – изменение стилистической окраски отрезка текста. Например, Steve Charnovitz, former director of the Global Environment and Trade Study (GETS), believes that the WTO "should begin to address the link between trade and labor and environmental concerns." Стив Шарновиц, экс-директор Института исследования глобальной окружающей среды и Торговли (ИИГОСИТ), полагает, что ВТО "должна начать рассматривать связь между торговлей и трудовыми и экологическими проблемами."  
 
 
 
 
 
 
 

      4 Исходный текст

     The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. Among the various functions of the WTO, these are regarded by analysts as the most important:

     It oversees the implementation, administration and operation of the covered agreements.

     It provides a forum for negotiations and for settling disputes.

     Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making. Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization. Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank.

      ITO and GATT 1947. Harry Dexter White and John Maynard Keynes at the Bretton Woods Conference – both economists had been strong advocates of a liberal international trade environment, and recommended the establishment of three institutions: the IMF (fiscal and monetary issues), the World Bank (financial and structural issues), and the ITO (international economic cooperation). The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation - notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund. A comparable international institution for trade, named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the United States and a few other signatories and never went into effect. In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization.

      Criticism of WTO. Protestors clashing with Hong Kong police in Wan Chai (area of waterfront) during the World Trade Organization Ministerial Conference of 2005. The stated aim of the WTO is to promote free trade and stimulate economic growth. Critics argue that free trade leads to a divergence instead of convergence of income levels within rich and poor countries (the rich get richer and the poor get poorer). Martin Khor, Director of the Third World Network, argues that the WTO does not manage the global economy impartially, but in its operation has a systematic bias toward rich countries and multinational corporations, harming smaller countries which have less negotiation power. He argues that developing countries have not benefited from the WTO agreements of the Uruguay Round because, among other reasons, market access in industry has not improved; these countries have had no gains yet from the phasing-out of textile quotas; non-tariff barriers such as anti-dumping measures have increased; and domestic support and export subsidies for agricultural products in the rich countries remain high. Jagdish Bhagwati asserts, however, that there is greater tariff protection on manufacturers in the poor countries, which are also overtaking the rich nations in the number of anti-dumping filings. Other critics claim that the issues of labor relations and environment are steadfastly ignored. Steve Charnovitz, former director of the Global Environment and Trade Study (GETS), believes that the WTO "should begin to address the link between trade and labor and environmental concerns."  Further, labor unions condemn the labor rights record of developing countries, arguing that, to the extent the WTO succeeds at promoting globalization, the environment and labor rights suffer in equal measure. On the other side, Khor responds that "if environment and labor were to enter the WTO system [...] it would be conceptually difficult to argue why other social and cultural issues should also not enter." Bhagwati is also critical towards "rich-country lobbies seeking on imposing their unrelated agendas on trade agreements." Therefore, both Bhagwati and Arvind Panagariya of Columbia University, have criticized the introduction of TRIPs into the WTO framework, fearing that such non-trade agendas might overwhelm the organization's function. Other critics have characterized the decision making in the WTO as complicated, ineffective, unrepresentative and non-inclusive, and they have proposed the establishment of a small, informal steering committee (a "consultative board") that can be delegated responsibility for developing consensus on trade issues among the member countries. The Third World Network has called the WTO "the most non-transparent of international organizations", because "the vast majority of developing countries have very little real say in the WTO system"; the Network stresses that "civil society groups and institutions must be given genuine opportunities to express their views and to influence the outcome of policies and decisions." Certain non-governmental organizations, such as the World Federalist Movement, argue that democratic participation in the WTO could be enhanced through the creation of a parliamentary assembly, although other analysts have characterized this proposal as ineffective.

     Some libertarians and small-government conservatives, as well as think tanks such as the Ludwig von Mises Institute, oppose the World Trade Organization, seeing it as a bureaucratic and anti-capitalistic organization not promoting free trade, but political interventionism. The chairman of the Ludwig von Mises Institute, Llewellyn H Rockwell Jr, argued that. . . the World Trade Organization says that the US must stop permitting US exporters to set up foreign subsidiaries that save as much as 30 percent in taxes they would otherwise pay. Now the US must either raise taxes by eliminating loopholes or face massive new sanctions that will seriously harm our export sector. [...] There's been a lot of talk recently about foreigners who hate our prosperity and civilization, and seek ways to inflict violence in retaliation. Well, here's another case in point, except these are not swarthy Islamic terrorists; they are diplomats and statesmen on nobody's list of suspicious characters.

     Principles of the trading system. The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO:

     Non-Discrimination. It has two major components: the most favoured nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members. "Grant someone a special favour and you have to do the same for all other WTO members." National treatment means that imported and locally-produced goods should be treated equally (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al. discriminating against imported goods).

     Reciprocity. It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialise.

     Binding and enforceable commitments. The tariff commitments made by WTO members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute settlement procedures.

     Transparency. The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review Mechanism (TPRM). The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures used to set limits on quantities of imports.

     Safety valves. In specific circumstances, governments are able to restrict trade. There are three types of provisions in this direction: articles allowing for the use of trade measures to attain noneconomic objectives; articles aimed at ensuring "fair competition"; and provisions permitting intervention in trade for economic reasons. Exceptions to the MFN principle also allow for preferential treatment of developing countries, regional free trade areas and customs unions. There are 11 committees under the jurisdiction of the Goods Council each with a specific task. All members of the WTO participate in the committees. The Textiles Monitoring Body is separate from the other committees but still under the jurisdiction of Goods Council. The body has its own chairman and only ten members. The body also has several groups relating to textiles.

     Above all, it’s a negotiating forum … Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with each other. The first step is to talk. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO's current work comes from the 1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the “Doha Development Agenda” launched in 2001.

     Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers — for example to protect consumers or prevent the spread of disease.

     It’s a set of rules … At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.

     The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side-effects — because this is important for economic development and well-being. That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be “transparent” and predictable.

     And it helps to settle disputes … This is a third important side to the WTO’s work. Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements. The WTO began life on 1 January 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. (The second WTO ministerial meeting, held in Geneva in May 1998, included a celebration of the 50th anniversary of the system.)

     It did not take long for the General Agreement to give birth to an unofficial, de facto international organization, also known informally as GATT. Over the years GATT evolved through several rounds of negotiations.

     The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in traded inventions, creations and designs (intellectual property).

     Principles of the trading system

     The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. They deal with: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more. But a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system.

     A closer look at these principles:

     1. Most-favoured-nation (MFN): treating other people equally under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.

     This principle is known as most-favoured-nation (MFN) treatment (see box). It is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods. MFN is also a priority in the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), although in each agreement the principle is handled slightly differently. Together, those three agreements cover all three main areas of trade handled by the WTO.

     Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group —   discriminating against goods from outside. Or they can give developing countries special access to their markets. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries. And in services, countries are allowed, in limited circumstances, to discriminate. But the agreements only permit these exceptions under strict conditions. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.

     2. National treatment: Treating foreigners and locals equally imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. This principle of “national treatment” (giving others the same treatment as one’s own nationals) is also found in all the three main WTO agreements, although once again the principle is handled slightly differently in each of these.

     National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax. 

     Lowering trade barriers is one of the most obvious means of encouraging trade. The barriers concerned include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively. From time to time other issues such as red tape and exchange rate policies have also been discussed.

     Since GATT’s creation in 1947-48 there have been eight rounds of trade negotiations. A ninth round, under the Doha Development Agenda, is now underway. At first these focused on lowering tariffs (customs duties) on imported goods. As a result of the negotiations, by the mid-1990s industrial countries’ tariff rates on industrial goods had fallen steadily to less than 4%.

     But by the 1980s, the negotiations had expanded to cover non-tariff barriers on goods, and to the new areas such as services and intellectual property.

     Opening markets can be beneficial, but it also requires adjustment. The WTO agreements allow countries to introduce changes gradually, through “progressive liberalization”. Developing countries are usually given longer to fulfil their obligations. 

     Sometimes, promising not to raise a trade barrier can be as important as lowering one, because the promise gives businesses a clearer view of their future opportunities. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition — choice and lower prices. The multilateral trading system is an attempt by governments to make the business environment stable and predictable.

     In the WTO, when countries agree to open their markets for goods or services, they “bind” their commitments. For goods, these bindings amount to ceilings on customs tariff rates. Sometimes countries tax imports at rates that are lower than the bound rates. Frequently this is the case in developing countries. In developed countries the rates actually charged and the bound rates tend to be the same.

     A country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. One of the achievements of the Uruguay Round of multilateral trade talks was to increase the amount of trade under binding commitments (see table). In agriculture, 100% of products now have bound tariffs. The result of all this: a substantially higher degree of market security for traders and investors.

     The system tries to improve predictability and stability in other ways as well. One way is to discourage the use of quotas and other measures used to set limits on quantities of imports — administering quotas can lead to more red-tape and accusations of unfair play. Another is to make countries’ trade rules as clear and public (“transparent”) as possible. Many WTO agreements require governments to disclose their policies and practices publicly within the country or by notifying the WTO. The regular surveillance of national trade policies through the Trade Policy Review Mechanism provides a further means of encouraging transparency both domestically and at the multilateral level. 

     The WTO is sometimes described as a “free trade” institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.

     The rules on non-discrimination — MFN and national treatment — are designed to secure fair conditions of trade. So too are those on dumping (exporting at below cost to gain market share) and subsidies. The issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade.

     Many of the other WTO agreements aim to support fair competition: in agriculture, intellectual property, services, for example. The agreement on government procurement (a “plurilateral” agreement because it is signed by only a few WTO members) extends competition rules to purchases by thousands of government entities in many countries. And so on. 

     The WTO system contributes to development. On the other hand, developing countries need flexibility in the time they take to implement the system’s agreements. And the agreements themselves inherit the earlier provisions of GATT that allow for special assistance and trade concessions for developing countries.

     Over three quarters of WTO members are developing countries and countries in transition to market economies. During the seven and a half years of the Uruguay Round, over 60 of these countries implemented trade liberalization programmes autonomously. At the same time, developing countries and transition economies were much more active and influential in the Uruguay Round negotiations than in any previous round, and they are even more so in the current Doha Development Agenda.

     At the end of the Uruguay Round, developing countries were prepared to take on most of the obligations that are required of developed countries. But the agreements did give them transition periods to adjust to the more unfamiliar and, perhaps, difficult WTO provisions — particularly so for the poorest, “least-developed” countries. A ministerial decision adopted at the end of the round says better-off countries should accelerate implementing market access commitments on goods exported by the least-developed countries, and it seeks increased technical assistance for them. More recently, developed countries have started to allow duty-free and quota-free imports for almost all products from least-developed countries. On all of this, the WTO and its members are still going through a learning process. The current Doha Development Agenda includes developing countries’ concerns about the difficulties they face in implementing the Uruguay Round agreements.

     The case for open trade

     The economic case for an open trading system based on multilaterally agreed rules is simple enough and rests largely on commercial common sense. But it is also supported by evidence: the experience of world trade and economic growth since the Second World War. Tariffs on industrial products have fallen steeply and now average less than 5% in industrial countries. During the first 25 years after the war, world economic growth averaged about 5% per year, a high rate that was partly the result of lower trade barriers. World trade grew even faster, averaging about 8% during the period.

     The data show a definite statistical link between freer trade and economic growth. Economic theory points to strong reasons for the link. All countries, including the poorest, have assets — human, industrial, natural, financial — which they can employ to produce goods and services for their domestic markets or to compete overseas. Economics tells us that we can benefit when these goods and services are traded. Simply put, the principle of “comparative advantage” says that countries prosper first by taking advantage of their assets in order to concentrate on what they can produce best, and then by trading these products for products that other countries produce best.

     In other words, liberal trade policies — policies that allow the unrestricted flow of goods and services — sharpen competition, motivate innovation and breed success. They multiply the rewards that result from producing the best products, with the best design, at the best price.

     But success in trade is not static. The ability to compete well in particular products can shift from company to company when the market changes or new technologies make cheaper and better products possible. Producers are encouraged to adapt gradually and in a relatively painless way. They can focus on new products, find a new “niche” in their current area or expand into new areas.

     Experience shows that competitiveness can also shift between whole countries. A country that may have enjoyed an advantage because of lower labour costs or because it had good supplies of some natural resources, could also become uncompetitive in some goods or services as its economy develops. However, with the stimulus of an open economy, the country can move on to become competitive in some other goods or services. This is normally a gradual process.

     Nevertheless, the temptation to ward off the challenge of competitive imports is always present. And richer governments are more likely to yield to the siren call of protectionism, for short term political gain — through subsidies, complicated red tape, and hiding behind legitimate policy objectives such as environmental preservation or consumer protection as an excuse to protect producers.

     Protection ultimately leads to bloated, inefficient producers supplying consumers with outdated, unattractive products. In the end, factories close and jobs are lost despite the protection and subsidies. If other governments around the world pursue the same policies, markets contract and world economic activity is reduced. One of the objectives that governments bring to WTO negotiations is to prevent such a self-defeating and destructive drift into protectionism.

     TRUE AND NON-TRIVIAL?

     Nobel laureate Paul Samuelson was once challenged by the mathematician Stanislaw Ulam to “name me one proposition in all of the social sciences which is both true and non-trivial.”

     Samuelson’s answer? Comparative advantage.

     “That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.”

     This is arguably the single most powerful insight into economics.