Kimberly Ann Elliott

Thomas O. Bayard

Should the United States use retaliatory threats to open foreign markets or deter unfair trading practices? This study reexamines the arguments for and against reciprocity and retaliatory threats in light of actual experience since early 1975, especially the United States' aggressive use of the section 301, special 301, and super 301 provisions of US trade law, which gives the president broad authority to retaliate against "unjustifiable, unreasonable, or discriminatory" foreign trade practices. It analyzes the advantages and disadvantages of these policies and the circumstances under which they are likely to succeed or fail. The study contains an empirical assessment of all section 301 cases concluded between 1975 and 1993. It also provides detailed case studies of various trade conflicts, including the super 301 negotiations involving Japan, Brazil, India, Taiwan, and Korea, financial services disputes with Japan and the European Union, the US-EU conflict over oilseeds, and the US-Japan beef and citrus negotiations. It concludes with an assessment of how the world trading system will change in the aftermath of the Uruguay Round of multilateral negotiations and why it is necessary and desirable for US policy to move from aggressive unilateralism to a strategy of aggressive multilateralism.

Reciprocity and Retaliation in U.S. Trade Policy

Gary Clyde Hufbauer

Jeffrey J. Schott

Institute for International Economics (U.S.)

This volume contains a review of evidence to assess whether sanctions work, to assess what determines their success and to assess why their effectiveness has declined. It looks at the uses of economic sanctions since 1914 and evaluates the effectiveness of sanctions as a policy tool. It contains 11 case studies of different countries which each include a chronology; the sanctioning country's objectives; the target country's response; the roles played by important third countries; relevant economic data and a calculation of costs; and an assessment of the outcome.

Kimberly Ann Elliott

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