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- 2. GATT “General Agreement onTariffs and Trade (GATT) A World organization established in 1947 to work for freer trade on a multilateral basis, the GATT was more of a negotiating framework than an administrative institution. It became WTO in 1995”. (Joshua.p.264)
- 3. Aim and Objectives To follow unconditionally most favoured nation (MFN) principles To carry on trade on the principle on non- discrimination, reciprocity and transparency To grant protection to domestic industry through tariffs only. To liberalize tariffs and non-tariff measures through multilateral negotiations
- 4. Activities There were twoactivities of GATT Conference Diplomacy Dispute settlement
- 5. Conference Diplomacy Toliberalized international trade it favoured the developed countries of the world Its trade policies in favour of poor countries were formulated It exploited by the developed countries to restrict the export of primary from Third World Countries.
- 6. Dispute Settlement The“Dispute Settlement Mechanism” of GATT proved weak To handle complaints about violations of its trade rules developed country followed such agricultural trade policies which were inconsistent with the GATT rules.
- 7. World Trade Organization TheWorld Trade Organization is a global, multilateral intergovernmental organization (IGO) that promotes, monitors, and adjudicates international trade.
- 8. WTO and ThirdWorld Countries The third world countries being unable to produce manufactured goods will not be able to compete with the developed countries which produce finished goods. The result of WTO supervision of the agreement of free trade will increase the market, for the developed countries and in this process the under-developed countries And in this process the imported goods from industrial nations thereby destroying domestic manufacturers. WTO treaty would add more than 200 billion dollars in the world income, 174 billion dollar out of them would go the developed countries.
- 9. Important Rounds ofWTO Kennedy Rounds-1960s It is called Kennedy Round because started during the President John Kennedy, it paid special attention to the growing role of European integration, which the United States found somewhat threatening. Tokyo Rounds-1970s This round adjusted rules of new conditions of world interdependence when, for instance, OPEC raised oil prices and Japan began to dominate the automobile export business. Uruguay Rounds-1986 The participant said GATT be renamed the “General Agreement to Talk and Talk”, a successful conclusion to the round would add more than $100 billion to the world economy annually. During this round they agreed to set up WTO. Besides US also forced European state to reduce subsidies US somewhat gained its objective, France won the right to protect its film industry against US films.
- 10. Most Favoured Nation “APrinciple by which one state, by granting another state MFN status, promises to give it the same treatment given to the first state’s most-favoured trading partner”. (Joshua.p.264)
- 11. Most Favoured NationPrinciples The agreement concluded into below provisions Rule to protect intellectual property rights entrepreneurs, entertainment, industries and software produces Lower tariff and non-tariff barriers for manufactured products and other goods Formation of new rules on trade and service Fair and more open competition in agriculture Full participation by the developing countries in global trading system More effective rules on anti-dumping, subsidies and import safeguards A more effective dispute settlement process Creation of World Trade Organization to implement this agreement
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- 13. Bilateral and RegionalAgreements Regional free trade areas also matter in the structure of world trade. In such areas, groups of neighboring states agree to remove most or all trade barriers within area. The creation of a regional trade agreement allows a group of states to cooperate in increasing their wealth without waiting for the rest of the world.
- 14. NAFTA The United State,Canada, and Mexico singed the North America Free Trade Agreement (NAFTA) in 1994, following a US Canadian free trade agreement in 1998. In NAFTA’s first decade. US imports from both Mexico and Canada more than doubled, then fell somewhat.
- 15. NAFTA The United State,Canada, and Mexico singed the North America Free Trade Agreement (NAFTA) in 1994, following a US Canadian free trade agreement in 1998. In NAFTA’s first decade. US imports from both Mexico and Canada more than doubled, then fell somewhat.
- 16. FTAA Politicians in Northand South America have long spoken of creating a single free trade area in the Western Hemisphere, from Alaska to Argentina- the Free Trade Area of the Americas (FTAA). To empower him to do so, President Clinton asked congress in 1997 to reinstate fast-track legislation. But democrats in Congress defeated the measure, demanding that free trade agreement include requirements for labour and environment standards for other countries.
- 17. ASEAN In 2007, theten Association of South East Asia Nations countries met with China, Japan, India, Australia, and New Zealand to begin negotiation an East Asian free trade area. The group, unlike some other Asia Pacific IGOs, doesn’t include the United Sates, but it does include half the world’s population and some of its most dynamic economies. In 2010, a free trade area went into effect among these countries. The ASEAN- China FTA is the world’s third largest free trade area, after the EU and NAFTA.
- 18. T-TIP EU and USofficials are currently negotiating the Transatlantic Trade and Investment (T- TIP), which would lower tariffs and lower barriers to investment between the US and the EU.
- 19. CIS Commonwealth of IndependenceStates (CIS) formed by 12 former Soviet republic, remains economically integrated, although Georgia quit after its 2008 war with Russia. It was previously a free trade zone by virtue of being part of single state with integrated transportation, communication, and other infrastructure links.
- 20. MERRCOSUR The South ConeCommon Market (MERRCOSUR), begun in the early 1990s with Brazil, Argentina, Uruguay, and Paraguay, which opposed letting Venezuela in. after Paraguay’s president was hastily impeached in 2012, Brazil engineered Paraguay’s suspension from MERCOSUR for ten months, during which Venezuela was admitted. Chile, Bolivia, Colombia, Ecuador, and Peru have joined as associate members.
- 21. CARICOM A Caribbean CommonMarket (CARICOM) was created in 1973, but the area is neither larger nor rich enough to make regional free trade a very important accelerator of economic growth, in 1969, Colombia, Ecuador, Peru, Bolivia created a group non known as the Andean Community of Nations, which had modest success and counts the MERCOSUR members as associate members.
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