nversion from non-tariff agricultural barriers to a tariff, which is restricted by a “bound” tariff rate. In theory this is meant to help trade by reducing the range of trade policies and creating a price ceiling that can be eventually negotiated down. However, many countries took this opportunity to create high bound tariffs on such commodities as rice, coarse grains, and sugar. “These tariffs are highly damaging,” for two reasons. First, they raise the prices for domestic consumers. Second, they make the goods less marketable as exports. Of considerable concern has been the disproportionate implementation of barriers in favor of industrialized countries, while at the same time being detrimental to developing nations. An example that comes from the Uruguay Round Agreement, is the reduction of a trade-weighted import duty on manufactures in industrialized countries to 3.4 percent. While duties on labor-intensive goods (exported by developing nations) are set four-times as high as those paid in developed counties. In the past, many developing countries have looked to the WTO to help them gain a portion of the market. In theory, the system is supposed to prohibit unfair restrictions on trade, such as high tariffs and quotas. But in practice, WTO rules have allowed industrialized countries to restrict imports from developing countries while they also force the latter to accept market liberalization rules, which in-turn benefit developed nations anyway. For instance, the WTO restricts tariffs on manufactured goods, but ignores high tariffs placed on commodities that developing countries export. One example is that, the US tariff on orange juice is set at 31 percent, while industrial tariffs are on average below 5 percent. Contradictions in the design and implementation of GATT/WTO rules have emerged from the trade liberalization system, which emphasizes the severe shortcomings of the international ...
