2. Countries entering into regional free-trade agreements do not need to extend the preferences negotiated in this context on an MFN basis.
3. A country can invoke temporary 'safeguard' protection of one of its industries suffering serious injury due to a surge of imports.
4. Temporary quantitative restrictions can be invoked by a country with serious balance-of-payment problems.
(The latter two cases are temporary exceptions and a public investigation has to be undertaken for limited relief from GATT obligations.)
Market Groups • V. Marketing in a Developing Country
I. GATT 1. GATT (General Agreement on Trade and Tariffs)
1947, Marrakech, Morocco Three basic elements: ▪Trade shall be conducted on a nondiscriminatory basis. ▪Protection shall be afforded to domestic industries through customs tariffs rather than quotas. ▪Consultation shall be the primary method used to solve global trade problems
Average US tariff rate fell from 62% in 1946 to 5.4% in 2001. Most imports either enter US duty free or are subject to low tariffs.The highest tariffs apply mainly to agri-food and tobacco products, as well as clothing,textiles, and footwear. In these industries, tariffs tend to increase with the degree of processing.
Many nations developed new tools for distorting trade flow, non-tariff tools that were not covered under GATT rules. Examples are “voluntary agreements” to restrain trade in textiles and apparel, and other non-tariff barriers.
Early in its existence, GATT achieved the liberalization of trade in 50,000 product, amounting to two-third of the trade value among its participants.In subsequent years, special GATT negotiations such as the Kennedy Round and Tokyo Round further reduced trade barriers and developed settlement mechanisms, better provisions Dealing with subsidies, and a more explicit definition of rules for import controls.
Most important tool: MFN
Four important exceptions to the key GATT principle of non-discrimination
1. Developed countries can give tariff preference to developing countries.
Starting with 24 like-minded governments,GATT was designed to operate by consensus. With a membership of 144, this consensus rule often led to a stalemate of many GATT activities.
The last GATT round,the Uruguay Round, took seven years, as its agenda had broadened to include trade in services, trade in intellectual property and a revised system of dispute-settlement mechanism.
The Global Environment of International Marketing
contents
• I. GATT and WTO • II.The InternationaBank Group • III.Protests against Global Institutions • IV. Global Markets and Multinational