GATTSalient features of

Uruguay RoundPresented By:

Aasif Choudhry

Akhil Goyal

GATT

• Established after Second World War

• Strived hard along with the World Bank and the International Monetary Fund to achieve international economic co-operation.

• Several trade rounds were being conducted by GATT.

Year/Years Name(Round) No. Countries

1947 Geneva Round 23

1949 Annecy Round 13

1950-51 Torquay Round 38

1955-56 Geneva Round 26

1961-62 Dillon round 26

1963-67 Kennedy Round 62

1973-79 Tokyo Round 102

1986-94 Uruguay Round 123

2001-present Doha Round 150

Principles adopted by GATT

• A contracting party’s trade policies must treat all GATT members equally.

• No member country shall discriminate between the members of GATT in the conduct of international trade.

• Members of GATT agree to apply the principle of ‘Most Favoured Nation’ to all import and export duties.

• National Treatment: Foreign goods, services, or investment are to be treated “no less favourably” within a nation’s domestic markets than competing products or services produced locally.

THE URUGUAY ROUND

• The 8th round of multilateral trade negotiations (MTN)

• Conducted within the framework of the General Agreement on Tariffs and Trade (GATT)

• Spanning from 1986 to 1994 and embracing 123 countries as "contracting parties".

• The Round transformed the GATT into the World Trade Organization.

• The Round came into effect in 1995 and has been implemented over the period to 2000 under the administrative direction of the newly created World Trade Organization (WTO).

• The round was launched in Punta del Este, Uruguay in September 1986.

• Followed by negotiations in Geneva, Brussels, Washington, D.C., and Tokyo, with the 20 agreements finally being signed in Marrakesh—the Marrakesh Agreement—in April 1994.

OBJECTIVES

• To reduce agricultural subsidies

• To put restrictions on foreign investment

• To begin the process of opening trade in services like banking and insurance.

BACKGROUND

• The 1982 Ministerial Declaration identified problems including structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage.

• To address these issues, the eighth GATT round (known as the Uruguay Round) was launched in September 1986, in Punta del Este, Uruguay. 

• It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review.

• The round was supposed to end in December 1990, but the US and EU disagreed on how to reform agricultural trade and decided to extend the talks.

• Finally, In November 1992, the US and EU settled most of their differences in a deal known informally as "the Blair House accord“.

• On April 15, 1994, the deal was signed by ministers from most of the 123 participating governments at a meeting in Marrakesh, Morocco.

• The agreement established the World Trade Organization, which came into being upon its entry into force on January 1, 1995, to replace the GATT system.

• It is widely regarded as the most profound institutional reform of the world trading system since the GATT's establishment.

ACHIEVEMENTS

• An umbrella agreement (the Agreement Establishing the WTO)

• Agreements for each of the three broad areas of trade that the WTO covers: goods and investment (the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures (TRIMS)), General Agreement on Trade in Services (GATS), and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

• Dispute settlement understanding(DSU)

• Agreement on Customs Valuation

• Reviews of governments' trade policies (TPRM)

GATT & WTO

• Most significant changes was the creation of the World Trade Organization (WTO).

• The 75 existing GATT members and the European Communities became the founding members of the WTO on 1 January 1995.

• The other 52 GATT members rejoined the WTO in the following two years (the last being Congo in 1997).

 

• Since the founding of the WTO, 21 new non-GATT members have joined and 29 are currently negotiating membership. There are a total of 157 member countries in the WTO, with Russia and Vanuatu being new members as of 2012.

• Of the original GATT members, Syria and the SFR Yugoslavia have not rejoined the WTO.

• The General Council of WTO, on 4 May 2010, agreed to establish a working party to examine the request of Syria for WTO membership.

• The contracting parties who founded the WTO ended official agreement of the "GATT 1947" terms on 31 December 1995. 

• Serbia and Montenegro are in the decision stage of the negotiations and are expected to become the newest members of the WTO in 2012 or in near future.

• While GATT was a set of rules agreed upon by nations, the WTO is an institutional body.

• The WTO expanded its scope from traded goods to include trade within the service sector and intellectual property rights. Although it was designed to serve multilateral agreements, during several rounds of GATT negotiations plurilateral agreements created selective trading and caused fragmentation among members.

• WTO arrangements are generally a multilateral agreement settlement mechanism of GATT.

Trade Agreements

• The Agreement on Agriculture.

• The Agreement on the Application of Sanitary and Phytosanitary Measures.

• The Agreement on Textiles and Clothing.

• The Agreement on Technical Barriers to Trade.

• The Agreement on Trade-Related Investment Measures.

• The Agreement on Preshipment Inspection.

• The Agreement on Rules of Origin.

• The Agreement on Import Licensing Procedures.

• The Agreement on Subsidies and Countervailing Measures.

• The Agreement on Safeguards.

• The General Agreement on Trade in Services.

• The Agreement on Trade-Related Aspects of Intellectual Property Rights.

• The Understanding on Rules and Procedures Governing the Settlement of Disputes.

• The Agreement on Government Procurement.

• The International Bovine Meat Agreement.

Agreement on Agriculture

• The tariffs to be reduced on an average by 36 per cent in the case of developed countries over 6 years and 24 percent in the case of developing countries over 10 years period.

• The least developed countries need not make any commitment for reduction.

The AoA has three pillars

• Market access

• Domestic support

• Export subsidies

The Coloured boxes

• The amber box contains subsidies that significantly distort trade and affect the amount of production. They must be reduced, and are open to legal challenge by other WTO Members.

• The blue box allows countries unlimited spending for direct payments to farmers if the payments are linked to programmes that limit the amount of production. These are open to challenge by other WTO Members, but are exempt from the obligation to be reduced.

• The green box contains support that is assumed to have no effect on production. This includes payments linked to environmental programmes, pest and disease control, infrastructure development and domestic food aid. It also includes direct payments to producers if those payments are not linked to current production. Green box subsidies are not subject to the obligation to be reduced.

Agreement on Trade in Textiles and Clothing

• This provide for phasing out the import quotas on textiles and clothing in force under the Multi-Fibre Arrangements since 1974, over a span of 10 years, i.e., by the end of the transition period on January 1,2005.

• Trade in textile and clothing products is no longer subject to quotas under a special regime outside normal WTO/GATT rules but is now governed by the general rules and disciplines embodied in the multilateral trading system.

• Actions under the safeguard provisions in Article 6 of this Agreement shall not apply to:

• (a) developing country Members’ exports of handloom fabrics of the cottage industry, or hand-made cottage industry products made of such handloom fabrics, or traditional folklore handicraft textile and clothing products 

• (b) historically traded textile products which were internationally traded in commercially significant quantities prior to 1982, such as bags, sacks, carpet backing, cordage, luggage, mats, mattings and carpets typically made from fibres such as jute, coir, sisal, abaca, maguey and henequen;

• (c) products made of pure silk

Agreement on Safeguards

• To improve the safeguards process and thereby encourage countries to choose this option over antidumping.

• Safeguard measures shall be applied to a product being imported irrespective of its source.

• Under Article XIX of the GATT, a country is allowed to take safeguard actions when imports seriously injure or threaten serious injury to the competing domestic sector.

• Article XIX also specifies that affected exporters may request compensation for loss of market access.

• The total period of application of a safeguard measure including the period of application of any provisional measure, the period of initial application and any extension thereof, shall not exceed eight years.

Agreement on Technical Barriers to Trade

• To ensure that technical regulations, standards, testing, and certification procedures do not create unnecessary obstacles to trade.

• Prohibits technical requirements created in order to limit trade, as opposed to technical requirements created for legitimate purposes such as consumer or environmental protection.

• closely linked to the Agreement on the Application of Sanitary and Phytosanitary Measures

General Agreement on Trade in Services

• To extend the multilateral trading system to service sector.

• The GATS applies in principle to all service sectors, with two exceptions:• Services supplied in the exercise of

governmental authority

• Air Transport Services

Criteria Supplier Presence

Mode 1: Cross-border supply

Service delivered within the territory of the Member, from the territory of another Member Service supplier

not present within the territory of the memberMode 2:

Consumption abroad

Service delivered outside the territory of the Member, in the territory of another Member, to a service consumer of the Member

Mode 3: Commercial presence

Service delivered within the territory of the Member, through the commercial presence of the supplier

Service supplier present within the territory of the MemberMode 4: Presence

of a natural person

Service delivered within the territory of the Member, with supplier present as a natural person

Note: From the document MTN.GNS/W/124, available on the World Trade Organization Website, posted courtesy of ISTIA

Agreement on Trade-Related Aspects of Intellectual Property Rights

• Copyright and Related Rights

• Trademarks

• Geographical Indications

• Industrial Designs

• Patents

• Layout-Designs (Topographies) of Integrated Circuits

• Protection of Undisclosed Information

• Control of Anti-Competitive Practices in Contractual Licenses