2.2Int Trade Framework: GATT and WTO (2016)Apunte Inglés
The GATT and the WTO
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International Trade 2016
2.2. International Trade Framework: GATT and WTO
The Great Depression, between 1929 and 1932, countries decided to restrict trade and globally
decreased from 3bn to 1bn dollar.
After the Second World War nation-states, specially the United States and the European Union, didn’t want to repeat another depressed era.
Failure of protectionist measures after the Great Depression. The measures applied didn’t have the results they expected, and they led to another World War.
Foundation of the GATT in 1949, that was signed by 23 nations I. Gets harder to trim the fat II. Most contentious product are put at the back burden (i.e. agricultural) III. Uruguay round the 1st to deal with trade restriction on services (i.e. consultancy, financial) The GATT is the organisation that evolved to the World Trade Organisation. GATT, in fact, had a big effect in the reduction of tariffs. A big change occurred during the Geneva Convention in 1947 to the Uruguay Convention (1986-1994).
Bretton Woods and European reconstruction were Western products.
More countries participate in the global economy, which means that there are more actors, and this complicates the process of agreements, as there are more players with interests to tackle with.
Everybody wants to protect their interests, which makes agreements more harder and difficult.
Because of the difficulty of creating and making agreements, some countries have created alternative institutions to the Bretton Woods one. The BRICs have created the New Development Bank, a new idea that was launched a year and a half ago.
2.3.2. Consequences Tariffs were really high, and it was the first thing that countries started to cut and decrease when negotiations started. As a consequence, countries still wanted to protect some infant industries, and they still had quotas as a way of protectionism.
But when quotas decreased, non tariff barriers increased, as they are the only protectionist measure that countries have —> They cannot apply tariffs or quotas.
Marta Busquets International Trade 2016 2.3.3. The World Trade Organisation FUNCTIONS The WTO PRINCIPLES STRUCTURE Administers the WTO Agreements and facilitates their operation and implementation Non-discrimination: Most Favoured Nation and National Treatment obligations Ministerial Conference Apex body for decisionmaking (meets every 2 years) Provides a forum for trade negotiations among member states on matters covered by the Agreements and for further liberalisation of trade amongst members General Council Free trade, as negotiations Performs the functions of are aimed at lowering trade the Conference between barriers meetings and has specific duties Predictibility and Responsible for the transparency, as there settlements of differences have to be binding and disputes between committments, transparent members trade policies, etc.
Dispute Settlement Body and Trade Policy Review Body Responsible for periodic reviews of the trade policies of members Promotion of fair competition Councils for Trade in Goods, Trade in Services and TRIPS — Report to and assist the General Council Technical assistance and training for developing countries Encouragment of development and economic reform Committees on special subjects Cooperates with other international organisations on subjects of mutual interest 2.3.3. Free Trade vs Restricted Trade The Great Depression of the 1930s prompted countries all over the world to throw up import barriers in an attempt to keep people employed.
Emerging economies are increasingly becoming more important in global economy.