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The Transition of the European Tariffs Institution and the Evolution of Free Ports' Function and Form under International Relations System |
Li Jinshan Hu Fengqiao |
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Abstract Free port is an ancient economic phenomenon, born from cross-regional commodity exchange. As a part of the international trade system, free ports’ development is under the influence of the international system reform and institution transition. At different stages of human history, the forms and functions of free (port) zones are changing and expanding, complying with diverse international political and economic rules. Among all the institutions that are designed to maintain the polity, the tariff system has the closest relation with the evolution of free ports. The history of original free port and original tariff can be traced back to ancient Europe. With decentralized powers and non-universal tariff system, the original tariff was hardly able to play a role in trade restriction, let alone the trade facilitation of original free ports in ancient Europe. The public authority in medieval Europe was based on a combination of universal theocracy and divided feudal hierarchy. The latter made it difficult for an integrated and standardized national tariff system to be established. The heavy exploitation caused by internal tariff systems gradually impeded market economy development. The emerging merchant class was eager to breach the tariff restriction. Some Commerce Guilds bought special permission of tariff exemption from feudal lords. Therefore, free ports and free cities were founded based on such franchise. With the enhancement of European Monarchial Power and the decline of Feudal System, European local tariffs had developed into modern national tariffs which were more systematic and standardized. After the opening of new sea routes, rapidly accumulated commercial capital promoted the unification of domestic markets around Europe and the formation of overseas markets. With European capitalism expanding into the whole world, some countries in advantage positions began to open their port cities or harbors in their colonies as free ports or free trade zones to promote external trade. After World War Ⅱ, the development of economic globalization, trade liberalization and regional integration created a favorable international environment for free ports and free trade zones. New free ports/zones were established worldwide in new forms such as EPZs and SEZs, and existing free ports continuously improved themselves to adapt to new international trade rules. Compared with other regions focusing on the vast construction of new free ports or free trade zones, the EU put more emphasis on the enhancement of efficiency. The environment of European free ports has changed a lot owing to the foundation of European Customs Union,European single market, as well as multilateral and plurilateral trade agreements signed under the rules of WTO. The publishment of New Union Customs Code by EU in 2008 put an end to the tariff exemption privileges in European free ports. The close of free port zone in Hamburger Harbor shows the fading of free ports in Europe. Though it seems to be an inevitable outcome due to international trade liberalization and the European tariffs integration, free ports’ function and form will still evolve as long as the international tariff, non-tariff barriers and national customs security threats exist. From an innovative perspective, the evolution of free ports will be regarded as a historical process and be analyzed in the international system. We try to reveal the correlation between free ports evolution and European tariff system transition, and outline the development trend of free ports with methods of historical analysis and system level analysis. As the interactive relation of the elements within the international system facilitating free ports’ evolution is also an important complementary, related research can be conducted on the next stage. With regard to further work, the study of the correlation between the world free ports and the existing international systems and national institutions, especially international trade order and modern customs policies can be non-negligible topics.
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