Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
A Brief Overview, again...
In 1993, the GATT was updated to include new obligations upon its signatories. One of the most significant changes was the creation of WTO.
Facts
- January 1st, 1995:
The 75 existing GATT members and the European Communities became the founding members of WTO.
The other 52 GATT members rejoined the WTO in the following two years.
Since the founding of the WTO, 21 new non-GATT members have joined and 29 are currently negotiating membership.
There are a total of 164 member countries in the WTO, with Liberia and Afghanistan being the newest members as of 2016.
Of the original GATT members, Syria and the SFR Yugoslavia have not rejoined the WTO.
- Whilst GATT was a set of rules agreed upon by nations, the WTO is an institutional body.
- Therefore, GATT was merely a forum for nations to discuss, while the WTO is a proper international organisation.
- The WTO expanded its scope from traded goods to include trade within the service sector and intellectual property rights.
A Brief Overview
- The World Trade Organization (WTO) is the only international organization that deals with the global rules of trade between nations.
- The WTO is built on WTO agreements signed by the majority of the world's trading nations.
- Its main function is :
Help producers of goods and services, exporters and importers better protect and manage their businesses.
- The WTO is essentially a mediation entity that helps with the international rules of trade between nations.
- But, the WTO has become a driving force behind the institution of globalisation and has had both positive and potentially adverse effects on the world.
- The WTO's efforts have positively increased trade expansion globally, but as a side effect, it has negatively impacted local communities and human rights.
- Advocates of the WTO cite the stimulation of free trade and a decline in trade disputes as benefits in today's global economy. Critics of the WTO point to the decline in domestic industries and the increase in foreign influence as negative impacts on the world economy.
- The WTO provides a platform that allows member governments to try to sort out any trade problems they face with other members.
- The WTO itself was born out of a negotiation, and its main focus is to provide open lines of communication between its members as it relates to international trade.
- For example, the WTO has helped lower trade barriers and increase trade between member countries. But, it has also helped maintain trade barriers when it makes the most global sense to do so. Therefore, the WTO tries to provide negotiation mediation that best suits the international economy.
- No negotiation, mediation or resolution would be possible without the foundational WTO agreements.
- These agreements set the legal ground rules for the international commerce that the WTO oversees.
- When a member country signs its agreement, it binds the country's government to a set of constraints that it must observe when making future trade policies.
- This gives producers, importers and exporters the chance to maintain their businesses while encouraging world governments to meet specific social and environmental standards.
A Brief Overview
- Was formed soon after WWII ended.
- Was a trade treaty implemented to boost economic recovery.
-Primary purpose of GATT was:
To increase international trade
By:
Eliminating or reducing various tariffs, quotas and subsidies
Maintaining meaningful regulations.
- Traces its origins to the 1944 Bretton Woods Conferen...
- Traces its origins to the 1944 Bretton Woods Conference.
- Laid the foundations for the post-World War II financial system.
Established two key institutions:
The International Monetary Fund.
The World Bank.
- The conference delegates also recommended the establishment of a complementary institution to be known as the International Trade Organization (ITO).
- They envisioned it as the third leg of the system.
- The conference delegates also recommended the establishment of...
- GATT became law on Jan. 1, 1948
- It was signed by 23 countries.
- GATT was refined over decades.
- Eventually led to the 123 countries creating the World Trade Organization (WTO) on Jan. 1, 1995.
- GATT held eight rounds in total from April 1947 to September 1986
First round was in: Geneva, Switzerland.
Second round was in: Annecy, France.
Third round was in: Torquay, England.
Fourth round was in: Geneva, Switzerland.
Fifth round was in: Geneva, Switzerland.
Sixth round was in: Geneva, Switzerland.
Seventh round was in: Tokyo, Japan.
Eighth round was in: Uruguay.
- 23 countries were invovled.
- April 1947
- The main topic during this round was tariffs.
- This original round led to:
- The formation of GATT.
- Establishing tens of thousands of tax concessions, affecting over $10 billion in trade.
- 13 countries were involved.
- April 1949.
- Tariffs again were the main subject.
- During this round, 5,000 more tax concessions were exchanged between countries.
- 38 countries were involved.
- April 1949.
- Nearly 9,000 tariff concessions were agreed upon, reducing many tax levels by up to 25%.
- January 1956.
- Japan was involved for the first time, along with 25 other countries.
- Main result of this round was a $2.5 billion reduction in tariffs across the globe.
- September 1960.
- 26 countries participated.
- Result was the elimination of an additional $4.9 billion in global tariffs.
- 1964.
- Involved 62 countries.
- Approximately $40 billion of tariff concessions were the result of this round.
- Important discussions regarding the curbing of predatory pricing policies known as dumping.
- 1972.
- 102 countries achieved $300 billion in global tariff reductions.
- 1986.
- Many more topics beyond tariffs were included in the main agenda, including intellectual property, agriculture and dispute settlement.
- Conducted from 1986 to 1994, culminated in the Marrakesh Agreement
- This meeting during this round of GATT led to the creation of the WTO.
- For 47 years, GATT reduced tariffs.
- This boosted world trade 8 percent a year during the 1950s and 1960s.
- That was faster than world economic growth. Trade grew from $332 billion in 1970 to $3.7 trillion in 1993.
- It was seen as such a success that many more countries wanted to join.
- By 1995, there 128 members, generating at least 80 percent of world trade.
- By increasing trade, GATT promoted world peace. in the 100 years before GATT.
- The number of wars was ten times greater than the 50 years after GATT. Before WWII, the chance of a lasting trade alliance was only slightly better than 50/50.
- Low tariffs destroy some domestic industries, contributing to high unemployment in those sectors.
- Governments subsidized many industries to make them more competitive on a global scale. U.S. and EU agriculture were major examples.
- The Nixon Administration took the U.S. dollar off the gold standard in 1973, which lowered the value of the dollar. That further lowered the international price of U.S. exports.
- By1980s, the nature of world trade had changed. GATT did not address the trade of services. E.g. Financial services became globalized. Foreign direct investment had become more important. As a result, when U.S. investment bank Lehman Brothers collapsed, it threatened the entire global economy.
- Like other free trade agreements, GATT reduced the rights of a nation to rule its own people. The agreement required them to change domestic laws to gain the trade benefits.
The prosperity of the world economy over the past half century owes a great deal to the growth of world trade which, in turn, is partly the result of farsighted officials who created the GATT. They established a set of procedures giving stability to the trade-policy environment and thereby facilitating the rapid growth of world trade. With the long run in view, the original GATT conferees helped put the world economy on a sound foundation and thereby improved the livelihood of hundreds of millions of people around the world.
Effects on trade liberalisation
- The average tariff levels for the major GATT participants were about 22 percent in 1947.
- As a result of the first negotiating rounds, tariffs were reduced in the GATT core of the US, UK, Canada, and Australia, relative to other contracting parties and non-GATT participants.
- By the Kennedy round (1962–67), the average tariff levels of GATT participants were about 15%.
- After the Uruguay Round, tariffs were under 5%.