Taxing, Regulating, and Trading Carbon

The global trade liberalization project has been one of the most successful efforts at international cooperation ever. Estimates of industrial nations' average tariffs in 1947, when the General Agreement on Tariffs and Trade (GATT) was negotiated, range from 20-40 percent. 1 The World Bank reports that in 1994, the year before the World Trade Organization (WTO) came into existence, the global applied average weighted tariff was still 8.57 percent. 2 Twenty years later, that number had fallen below 3 percent, and many developed nations, including the United States and the European Union (EU), have applied average tariffs around 1.5 percent. 3 Beyond tariff rates, the GATT expanded from twenty-three original parties to the WTO's 164. Along with over three hundred regional free trade agreements and customs unions currently in force, the WTO has also reduced non-tariff barriers to trade in goods and liberalized trade in services. 4 From a historical, economy-wide perspective, we live in a world that the GATT framers would likely have thought approximates free trade

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