Download History of Trade Negotiations

History of Trade Negotiations
GATT
• International Trade Organization (ITO)
failed to be established.
• Post WWII trade negotiations took place
under the auspices of General Agreement
on Tariffs and Trade (GATT), established
on a provisional basis as a draft charter of
ITO, on Tariffs and Trade).
Earlier Rounds
• Developing countries played only a small role in
the first seven rounds of trade negotiations
• Article XVIII in GATT allows them to “implement
programmes and policies of economic
development designed to raise the general
standard of living of their people, to take
protective or other measures affecting imports.”
• Developed countries were far more interested in
each others’ market than in those of developing
countries
Kennedy Round (63-67)
• The initial creation of the European Common
Market in the late 1050s was one of the key
motivations for the American initiative to launch
the Kennedy Round in the early 1960s.
• The US wanted to reduce the newly created
discrimination against American exports, and
also to build the “new Atlantic partnership”
enunciated by President Kennedy.
Tokyo Round (1973-79)
• The extension of its discrimination in important
new markets, was an important factor in the
American decision to insist on the Tokyo Round
in the 1970s.
• As a result, the word trade system was tailored
to the interests of the developed countries.
• Protection was progressively reduced on the
goods of export interest to developed countries,
but remained on goods exported intensively by
developing countries.
Outcome
• The GATT came to cover trade in all goods
except agriculture and textiles.
• Textiles were covered by the Multifiber
Arrangement (MFA), through which developing
countries had quotas on the amount of textiles
they could export to developed countries.
• Developed countries didn’t impose any
restrictions on textile imports from other
developed countries.
Unfair trade
• “When they [the developed countries] do not
discriminate against those countries [the
developing countries] in the form proscribed by
the most-favored-nation principle,… their
policies are in effect discriminatory in that the
most serious barriers are erected in goods which
the less developed countries typically have a
comparative advantage in producing—
agricultural commodities in raw or processed
form, and labor-intensive, technologically
unsophisticated consumer goods” (Johnson
1967)
Uruguay Round (86-94)
• The round started in 1986 and ended in
1993.
– Expanding service trade
– trade-related aspects of intellectual property
rights (TRIPs)
– trade-related investment measures (TRIMs).
– Dispute settlement scheme
– To form WTO
Outcome
• Many of the new obligations imposed significant burdens
on developing countries.
• “the developing countries took bound commitments to
implement in exchange for unbound commitments of
assistance”
• It is estimated that the vast majority of the gains from the
Uruguary Round accrue to developed countries, with
most of the rest going to a relatively few large exportoriented developing countries.
• Some estimates report that the 48 least developed
countries are actually losing a total of US$600M a year
as a result of the Uruguay Round.
Outcome
• After the implementation of Uruguay
Round commitments, the average
OECD tariff on imports from
developing countries is four times
higher than on imports originating in
the OECD.
Doha Round
• Seattle Round: started and ended on
November 30, 1999.
• Doha Round: started in Nov 2001
– The developed countries promised to make
the talks a “development round”; to redress
the imbalances of previous rounds.
– Cancun, 2003
– Hong Kong, 2005
– Basically dead