Part 3: From GATT
to the WTO: A Brief History
GATT
The WTO officially came into being in 1994, the successor
to GATT—the General Agreement on Tariffs and Trade,
itself agreed to in 1947. GATT took the place of what
was supposed to be the third Bretton Woods institution
(along with the IMF and World Bank). However, opposition,
particularly from the US, prevented formation of an international
body governing trade right after World War II. The GATT
was a kind of stopgap measure, made to put something in
place: it was not the result of a treaty; its framers
never intended it to last for very long. Nonetheless,
it grew into an institution fairly capable of securing
free trade—especially, its critics say, on rich
nations’ behalf.
GATT’s ideals reflected those in the Reciprocal
Trade Agreements Act of 1934, which worked powerfully
to liberalize trade and simplify the process of making
trade policy against the backdrop of Smoot Hawley and
the Great Depression. Transparency and non-discrimination
were the GATT’s early watchwords: it sought to make
international trade subject to clear rules and to ensure
that parties were treated equally.
Like the WTO, GATT operated through trade negotiation
rounds. Each round had an agenda, and many a list of accomplishments.
In its founding Geneva round of 1947, GATT cut tariffs
on some 45,000 items among its 23 members. In the next
4 rounds, between ’47 and ’61, it had smaller
accomplishments, as Europe sought trade protection in
rebuilding. In the Kennedy round of ’64–’67,
the GATT enlarged its membership, lowered tariffs overall
by 35%, and established codes for different aspects of
trade policy, like subsidies, import licensing, meat and
dairy product standards, and so on. The Tokyo round (’73–’79)
saw increasing fragmentation, due in part to GATT’s
growing membership; many nations chose to participate
in GATT “à la carte.” They agreed to
some core principles set down by GATT, but only adhered
to some codes and chose to opt out of others. At this
point, GATT also began to deal seriously with non-tariff
barriers, with which the WTO is still preoccupied today.
The WTO
The Uruguay round (’86–’93) officially
established the WTO, which now addresses new trade issues,
such as trade in services (GATS), intellectual property
rights (TRIPS) and investment measures (TRIMS). Its dispute
settlement mechanism has now been made more effective.
Importantly, it is now more than an agreement between
“contracting parties” with rules that can
be ignored. It is now an agreement that demands adherence
to all of its parts.
WEBLINKS/VIDEOS: For more information
about the WTO trade issues, click on the links below.
GATS
http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm
TRIPS
http://www.wto.org/english/tratop_e/trips_e/intel2_e.htm
TRIMS
http://www.wto.org/english/tratop_e/invest_e/trims
Dispute settlement mechanism
http://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm
Structural composition of the WTO
http://www.wto.org/english/thewto_e/whatis_e/tif_e/org2_e.htm
VIDEO: History of the transition from GATT to the WTO, a video produced by the WTO
GATT to the WTO (ID: student, Password: eco300), or available at http://www.wto.org/english/res_e/webcas_e/webcas_e.htm
VIDEO: WTO's dispute resolution process watch
WTO
disputes video (ID: mals620, Password: year0405),
or available at http://www.wto.org/english/res_e/webcas_e/webcas_e.htm
More recent developments at the WTO
Since the Uruguay round, the WTO has stumbled. The Seattle
millennium round in ’99 was disrupted by street
protests and riots, which highlighted the unevenness of
international free trade’s effects. The protesters,
most of whom were peaceful, were comprised of an unlikely
assortment of allies: environmentalists, labor unions,
human rights activists, liberal clergy, and students against
sweatshops were among those who shut down the WTO that
weekend. Since then, the Doha round (’02—present)
has been plagued with concerns about security, and also
with making the WTO seem open to the criticisms aired
in Seattle. The most recent talks, in Cancun, Mexico,
ran aground over agricultural subsidies in developed regions
of the world.
AUDIO: For more on this case listen
to:
World trade talks fall apart
http://www.npr.org/features/feature.php?wfId=1431273
Regardless of the difficulties
the WTO has had in promoting new rounds of trade negotiations,
their work continues. Numerous rulings, many of which
we’ve learned about in previous units, have been
made; and the outcome of these decisions clearly influence
both the economic and political decisions of the member
nations—typically in favor of freer trade. An additional
example of these rulings is the WTO’s 2004 ruling
on alleged protectionist practices by the United States
against Canadian lumber interests.
WEBLINK/AUDIO CLIP. For an audio clip
on the WTO’s 2004 ruling on the US-Canadian lumber
dispute listen to:
BBC
audio clip (ID: mals620, Password: year0405)
