ABSTRACT
In managing the stability and development of a national economy, the appropriate level of government regulation of market transactions has always been a central question. This chapter examines whether and to what extent the international trade regime contributed to economic liberalization in the countries. It examines how the international trade regime has legally and politically affected the process of liberalization in the developing and transitional economies, with the emphasis placed on a regime’s dual, apparently conflicting, functions. From the beginning of the General Agreement on Tariffs and Trade (GATT), advanced industrial countries as well as developing countries have been allowed to adopt several exceptional measures to protect domestic markets from foreign competition. The main purpose of exceptional GATT treatment was to obtain permission for import-decreasing restrictions in developing countries.
