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GATT
• The General Agreement on Tariffs and Trade (GATT) was reached, instead. • The purpose of GATT was the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. • GATT came into force on 1 January 1948.
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GATT and WTO
• Under GATT, 8 rounds of multilateral trade negotiations were concluded. • GATT was in force until the conclusion of the Uruguay Round Agreements in Marrakesh in 1994. • The Uruguay Round Agreements established the World Trade Organization on 1 January 1995 (as a successor to GATT). • The GATT still has effects under the WTO system (on the basis of the modifications of the GATT 1994 version). 6
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The Bretton Woods Conference • In July 1944, the 44 allied nations of the Second World War participated in a conference at Bretton Woods in New Hampshire, US. • Agreements were reached to set up the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund (IMF).
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WTO – an overview (Cont.)
• The WTO agreements seek to ensure that international trade freely flows as far as possible. • The WTO agreements boosts the confidence of private individuals, business enterprises and governments. • The WTO wants to make sure that there are sufficient trade rules in each and every place of the world which are transparent, fair and predictable.
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WTO – an overview
• The WTO now has 164 members. • A Secretariat is in charge of running the daily activities of the WTO. • The Secretariat is led by the WTO Director-General. • English, French and Spanish are the three official languages of the WTO. • The Secretariat is located in Geneva, Switzerland.
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The WTO Agreements
The WTO agreements mainly relate to trade in goods, trade in services, and trade-related intellectual property protection and foreign investment. • Advocating principles of liberalization. • Accepting permitted exceptions. • Illustrating member countries’ commitments to lowering trade barriers and opening up markets. • Showing procedures for settling disputes. • Allowing special treatment for developing countries. • Requesting various governments to make their trade policies clear, transparent and predictable.
International Business Law
Lecture 2 (re-cap)
The World Trade Organization
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The Oriቤተ መጻሕፍቲ ባይዱin of the WTO
• The predecessor of the WTO - the General Agreement on Tariffs and Trade (GATT). • The multilateral attempt in the 1940s to improve the post-Second World War world economy.
The WTO Agreements (Cont.)
The WTO agreements deal with certain specific sectors. For goods (under GATT), they deal with • Agriculture. • Health regulations for farm products. • Textiles and clothing. • Product standards. • Investment measures. • Anti-dumping measures. • Customs valuation methods. • Pre-shipment inspection. • Rules of origin. • Import licensing. • Subsidies and counter-measures. 15 • Safeguards.
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WTO – an overview (Cont.) • The core of the WTO system is the WTO agreements. • The WTO agreements specify the rules for carrying out cross-border trade. • The WTO agreements are of a contractual nature, having a binding force upon all the relating governments; member nations have to have their trade policies properly made and implemented in line with the WTO rules and principles.
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The Bretton Woods Conference (Cont.)
• The Bretton Woods Conference also attempted to liberalize international trade. • The recommendation was to establish the International Trade Organization (to regulate international trade). • The proposed International Trade Organization eventually failed to be established.
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The WTO Agreements (Cont.)
Normally those agreements bear a simple structure with six parts: • An umbrella agreement (the Agreement Establishing the WTO). • Agreements for trading goods. • Agreements for trading services. • Agreements for intellectual property. • Dispute settlement. • Reviews of governments’ trade policies.
GATT and WTO (Cont.) • Under the WTO, a new round of negotiations, the Doha Round, started in 2001 and is still not yet to conclude. • During the ongoing Doha Round, Bali Package was signed in 2013. • GATT and WTO successfully reduced tariffs - the average tariff levels were 22% in 1947, and lowered to 5% after the Uruguay Round.