GATT

GATT was born in 1948

Objectives of GATT
1. Raising Standard of Living
2. Ensuring full employment
3. Developing full use of the resources of
the world
4. Expansion of production and
international trade.
 THE URUGUAY ROUND
Uruguay Round (UR) is the name by which
the eighth and latest round of Multilateral trade
negotiations (MTNs) held under the auspices of
the GATT is popularly known because it was
launched in Punta del Este in Uruguay, a
developing country, in September 1986.

Arthur DunKel
The UR sought to broaden the scope of MTNs far
wider by including new areas such as:

1. Trade in services
2. Trade related aspects of intellectual property
(TRIPs)
3. Trade related investment measures (TRIMs)
UR agrement , GATT was converted from a
provisional agreement into a formal
international organization called World
Trade Organisation (WTO) with effect from
1st January 1995.
 Difference Between GATT and WTO

• GATT was ad hoc and • WTO and its agreements

provisional are permanent
• GATT had contracting • WTO has member
parties
• GATT system allowed • WTO does not permit this
existing domestic
legislation to continue
even if it violated a GATT
agreement
• GATT was less powerful,
• WTO is more prowerfull
dispute settlement
system was slow and less that GATT
efficient
Principles of WTO
• Nondiscrimination
• Reciprocity
• Binding and Enforceable Commitments
• Transparency
• Safety Valves
(a) Public health or national security and to protect
industries that are seriously injured by competition from
imports.
(b) Right to impose countervailing duties on imports that
have been subsidized and antidumping duties on imports
that have been dumped (sold at a price below that
charged in the home market).
(c) Measures to correct a serious unfavorable balance of
payment or the desire to protect an infant industry
 Functions of WTO:
1. Administering WTO trade agreements.
2. Forum for trade negotiations
3. Handling trade disputes
4. Monitoring national trade policies: The WTO shall
administer the Trade Policy Review Mechanism
(hereinafter referred to as the "TPRM") provided for in
Annex 3 to this Agreement.
5. Technical assistance and training for developing
countries
6. Cooperation with other international organizations:
With a view to achieving greater coherence in global
economic policy-making, the WTO shall cooperate, as
appropriate, with the International Monetary Fund and
with the International Bank for Reconstruction and
Development and its affiliated agencies.
 The WTO Structure
153  members on 23 July 2008
 THE FINAL ACT:

• The WTO’s agreements are often called

the Final Act of the 1986–1994 Uruguay
Rounds of trade negotiations, although
strictly speaking the Final Act is the first of
the agreements.
1. Agriculture: fairer markets for all
2. Health and Safety measures:
3. Helping Least Developed and food importing
countries:
4. Agreement on Technical Barriers to Trade
5. Agreement on Trade Related Aspects of
Investment Measures
6. Anti-dumping
7. Customs Valuation
8. Agreement on Preshipment Inspection
9. Agreement on Import Licensing Procedures
10. Agreement on Subsidies and Countervailing
Measures
11. Agreement on Safeguards
12. General Agreement on Trade in Services
 TRADING BLOCS
• Regional trade blocs are
intergovernmental associations that
manage and promote trade activities for
specific regions of the world.
 Impact of Trading
Blocs
• Trade Creation and Trade Diversion:
• Trade creation occurs when, because of
free trade, industries produce more and
more goods at lesser cost. Trade diversion
occurs when trade is diverted from
countries outside the trading area to
countries inside
• Prices and Competition:
• Trade barriers, when removed, will result
in lower prices of products. Buyers can
buy more at cheap rates. The more
relevant issue relates to competition. By
removing barriers between national
markets, trading blocs create competition.
Dynamic Effects of Integration
• Trading blocs promote integration which in
turn results in efficient allocation of
resources, promotion of some businesses
and development of new technology