International commercial diplomacy - GATT/WTO

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International commercial diplomacy - GATT/WTO
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WTO some facts
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The 10 benefits
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Benefit nr 1 Peace

• Peace is partly an outcome of two of the most
  fundamental principles of the trading system
  helping trade to flow smoothly, and providing
  countries with a constructive and fair outlet for
  dealing with disputes over trade issues. It is
  also an outcome of the international confidence
  and cooperation that the system creates and
  reinforces.
• History is littered with examples of trade
  disputes turning into war. One of the most vivid
  is the trade war of the 1930s when countries
  competed to raise trade barriers in order to
  protect domestic producers and retaliate against
  each others barriers. This worsened the Great
  Depression and eventually played a part in the
  outbreak of World War 2.

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Nr 10 Good government
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The World Trade Organisation
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Principles of the WTO
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Why is it called most-favoured?

• The name sounds like a contradiction. It suggests
  some kind of special treatment for one particular
  country, but in the WTO it actually means
  non-discrimination treating virtually everyone
  equally.
• Each member treats all the other members equally
  as most-favoured trading partners. If a country
  improves the benefits that it gives to one
  trading partner, it has to give the same best
  treatment to all the other WTO members so that
  they all remain most-favoured.

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Exceptions to MFN

• About 100 of the 144 members are developing
  countries - and it it permitted to discriminate
  favourably towards developing countries
• Regional trade agreements are permitted

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Regional agreements
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GATT- WTO
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GATT - WTO
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Did GATT succeed ?

• Tariff rates dramatically reduced from 40 to 4
  on industrial goods
• Much smaller success with NTBs
• Small or no legal power, but has been much
  strengthened in the WTO
• Outstanding problems
• regional agreements
• EU and CAP (Common Agricultural Policy)

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Eight rounds since 1947
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What happened in the different rounds of
negotiations between 1947 and nowadays?

• The first five GATT rounds concentrated largely
  on tariff reductions. The first round, involving
  23 countries in 1947, resulted in 45,000 tariff
  concessions affecting 10 billion of trade, about
  one-fifth of the world's total. The 23 also
  agreed to adopt the General Agreement in Tariffs
  and Trade, rescued from the failed attempt to
  create an International Trade Organisation.
• The next GATT rounds concentrated on further
  reducing tariffs. Then, the Kennedy Round in the
  mid-sixties brought about a GATT Anti-Dumping
  Agreement. The Tokyo Round during the seventies
  was the first major attempt to tackle trade
  barriers that do not take the form of tariffs
  (non-tariff barriers), and to improve the system.
  The eighth, the Uruguay Round of 1986-94, was the
  latest and most extensive of all. It led to the
  WTO and a new set of agreements covering goods,
  services, intellectual property and a new dispute
  settlement mechanism.

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The Uruguay Round
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Problem nr 1 Agriculture
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Agriculture - very expensive
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Solving disputes
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Much faster than it used to be