A BRIEF HISTORY OF THE GATT
Beggar-thy-neighbour tariff policies of 1930s => WWII Bretton Woods Conference at the end of the WWII, finance ministers from the Allied nations gathered to discuss creation of a new monetary system that would support postwar reconstruction, economic stability, and peace. => IBRD & IMF => need for a third institution, ITO. 1940s: Representatives met to design a postwar trading system that would parallel the international monetary system. y y
Draft a Charter for ITO, Negotiate the substance of an ITO agreement (rules governing governing international trade and reductions in tariffs.
1947: 23 Members Today: 153 Members
GATT TRADE ROUNDS
Year 1947 1949 1951 1956 Place / Name Geneva Annecy Torquay Geneva Subjects Covered Tariffs Tariffs Tariffs Tariffs Tariffs Countries 23 13 38 26 26 62 102
1960 ² 1961 Dillon Round
1964 ² 1967 Kennedy Tariffs and Anti-Dumping Round Measures 1973 ² 1979 Tokyo Round Tariffs, Non-tariff Measures, Framework Agreements
1986 ² 1994 Uruguay Tariffs, Non-tariff Measures, 123 Round Rules, Services, Intellectual Property, Dispute Settlement, Textiles, Agriculture, Creation of WTO
TIMELINE OF GATT & WTO -1
1944: At the Bretton Woods Conference, which created the IBRD and IMF, there is talk of a third organisation, the ITO. 1947: As support for another international organisation wanes in the U. S. Congress, the General Agreement on Tariffs and Trade is created. The Gatt Treaty Creates a set of rules to govern trade among 23 member countries rather than a formal institution. 1950: Formal U.S. Withdrawal from the ITO concept as the U.S. Administration abandons efforts to seek congressional ratification of the ITO
TIMELINE OF GATT & WTO -2
1951 ² 1986: Periodic negotiating rounds occur, with occasional discussions of reforms of GATT. In 1980s, serious problems with dispute resolutions arise. The Uruguay Round, a new round of trade negotiations, is launched. This culminates in 1994 Treaty that establishes the WTO. 1995: The WTO is created at the end of the Uruguay Round, replacing GATT. 2009: The GATT consists of 153 members, accounting for approximately 97% of world trade.
SUCCESS OF GATT
Regular meetings of GATT members are known as ´negotiating rounds y
Primarily focus on further reductions in the in the maximum tariffs that countries could impose on imports from other GATT members
Tariffs on manufactured products fell from a tradeweighted average of roughly 35% before the creation of GATT in 1947, to about 6.4% at the start of the Uruguay round in 1986. The volume of trade among GATT members surged: In 2000 the volume of trade among WTO members stood at 25 times its 1950 volume.
UNSOLVED PROBLEMS OF GATT -1
By the 1980s several problems had surfaced:
The dispute resolution mechanism of GATT was not effectively functioning. Longstanding disagreements among members regarding issues like government subsidies, regulations for FDI« A number of commodities (agricultural products and textiles) were widely exempt from GATT disciplines. Certain forms of administered trade protection (antidumping duties, VERs, counterveiling duties) were restricting trade and distorting trade patterns in many important sectors.
UNSOLVED PROBLEMS OF GATT -2y
Trade in services was expanding rapidly and GATT had no rules regarding trade in services. Countries producing intellectual property were becoming increasingly frustrated by the lack of intellectual property protection in many developing nations. Rules regarding trade related investment measures (eg. Domestic purchase requirements for plants built from FDI) were hotly disputed
A first attempt for reforming the system, Progressive reduction of tariffs, average tariff on industrial products became 4.7%, Discussion of fundamental problems:...