General tariff and trade agreement
The General Agreement on Tariffs and Trade ( english General Agreement on Tariffs and Trade , GATT ) was concluded on 30 October 1947, when the plan for an International Trade Organization (ITO) could not be realized. The agreement entered into force on January 1, 1948.
The GATT of 1947 did not establish an international organization, but was a treaty under international law , which is why its 23 founding members ( Australia , Belgium , Brazil , Burma , Canada , Ceylon , Chile , Republic of China , Cuba , France , India , Lebanon , Luxembourg , New Zealand , the Netherlands , Norway , Pakistan , Southern Rhodesia , South African Union , Syria , Czechoslovakia , United Kingdom and the USA ) were also referred to as "contracting parties" and not as member states. The Federal Republic of Germany joined this treaty system on October 1, 1951. Austria has been a member of the GATT since October 19, 1951. Switzerland joined as a full member in 1966. All members of the World Trade Organization (WTO) are also contractual partners of GATT. Until its replacement by the WTO in 1995, the seat of the GATT Secretariat was in Geneva . The WTO as the umbrella organization of the GATT still has its headquarters there today.
It represents an international agreement on world trade. Up until 1994, tariffs and other trade barriers were gradually dismantled in eight negotiation rounds . In the course of history, the GATT laid the foundation for the establishment of the World Trade Organization (WTO 1995), into which it is still incorporated today. At that time, 123 member countries with equal rights belonged to the agreement. To distinguish between the original and the current WTO agreement, the year 1947 and 1994 are usually added.
The GATT began in the USA in 1944, when the Bretton Woods Conference took place in which 44 countries took part. This is responsible for the establishment of a fixed exchange rate system, founded the International Monetary Fund (IMF) and the World Bank . On one point, however, no agreement could be reached: on the establishment of a World Trade Organization. Instead, the Bretton Woods Conference developed an agreement that came into force in 1948: The General Agreement on Tariffs and Trade (GATT) .
Areas of responsibility
The GATT stipulated that tariffs, levies and other barriers in international trade must be removed. This should promote world trade and the world economy. This resulted in two principles: First, the most-favored nation clause (principle of equal treatment), under which all trading partners in a country are granted the same tariff concessions. Second, the prohibition of discrimination, where exemptions from the prohibition of quantitative restrictions apply to everyone. In addition, the GATT should establish a process for resolving international trade disputes. The measures focused primarily on the trade in goods. Exceptions to the GATT principles are also possible, such as the most favored nation principle within a customs union or free trade area such as the European Union . Neighboring and developing countries can also be granted special trade preferences .
Principles of equal treatment ("anti-discrimination")
Disadvantages in trade are essentially to be prevented by three principles:
- According to the most-favored nation principle in Art. I GATT, trade advantages granted to one contractual partner must also apply to all other contractual partners. The principle of reciprocity , which is also anchored in some rules, contradicts the most-favored nation principle .
- According to the principle of national treatment in Art. III GATT, foreign and domestic providers must be treated equally.
- According to the quota ban , quantitative restrictions on imports or exports are generally not permitted.
Art. XIV allows exceptions to the most-favored nation principle .
Art. XII allows restrictions to protect the balance of payments .
Art. XIX allows emergency measures to be taken when importing certain goods in order to prevent domestic producers from being seriously harmed. This exception was frequently used under GATT 1947, but is more strictly regulated in GATT 1994 by an additional convention.
Art. XXV: 5 allows in exceptional, unforeseen circumstances that a contracting party is released from an obligation. The contracting parties decide on such an exception with a two-thirds majority .
Art. XX regulates general exceptions. Subject to the proviso that it does not take place arbitrarily or lead to a disguised restriction on international trade, the Parties may take the following measures, among others:
- Measures to protect the life and health of humans, animals and plants;
- Measures with regard to the goods produced in the penal system ;
- Measures to protect national cultural assets of artistic, historical or archaeological value.
And under certain conditions:
- Measures for the conservation of exhaustible natural resources;
- Measures to implement obligations under an intergovernmental commodity agreement;
- Measures that result in restrictions on the export of domestic raw materials.
Art. XXIV regulates exceptions to free trade areas and customs unions.
From 1948 to 1994, the GATT established the rules for a large part of world trade. During this period there were eight rounds of negotiations lasting several years (including in France, Great Britain, Belgium and Morocco). These cross-continental meetings began in Havana, Cuba, in 1948. It turned out that GATT was the only multilateral instrument to control international trade. In the early years, trade rounds focused on lowering tariffs. The so-called Kennedy Round (1964–1967) resulted in an anti-dumping agreement to avoid falling prices and a lesson in development. In the 1970s, the Tokyo Round was the first major attempt to oppose international trade barriers. The last and most extensive round of negotiations, the Uruguay Round (1986–1994) led to the establishment of the WTO and a new catalog of agreements.
The Tokyo Round
The Tokyo Round (1973–1979) represented a first attempt to reform the international trading system. 102 countries took part in these negotiations. Efforts have continued to further reduce trade tariffs. One result was the average reduction in customs duties for industrially manufactured products to around 4.7%. This was done according to the principle of proportionality: the higher the tariff, the higher the reduction.
There were disagreements between the participants in other key areas of the negotiation. The reform of agricultural trade was a point of contention. Nevertheless, a number of agreements relating to duty-free national borders were agreed. In many cases, only a small number of GATT members signed these agreements and understandings. These unaccepted agreements were not multilateral and were unofficially referred to as codes . Several codes were revised in the Uruguay Round and converted into multilateral commitments.
The Uruguay Round
The cornerstone of the Uruguay Round was laid in November 1982 at a meeting of the delegates in Geneva. The approved work program became the basis of the agenda negotiated in Uruguay. In September 1986, negotiations began in Punta del Este (Uruguay). They contained outstanding trade issues. The trading system was expanded to include several new areas in order to improve trade in the sensitive areas of agriculture and the textile industry. In addition to these points, all of the original GATT texts were discussed. This negotiating assignment, the largest to date, was to be completed over a period of four years. Halfway through, the commissioners met in Montreal, Canada, 1988 to assess the progress of the job. However, no agreement could be reached in these talks. For this reason, the officials met again in Geneva the following April. At the end of the negotiations, a package of decisions had been made.
In order to benefit the developing countries, concessions were made in the market transparency for tropical products. In order to quickly resolve disputes among trading partners, a conflict system and a review mechanism for trade policy were introduced. On the other hand, little results were achieved on agricultural issues and it was decided to continue discussions later. Ultimately, a first draft of the final legal agreement, the "Final Act", emerged. This was translated by the later General Director of GATT Arthur Dunkel and presented in Geneva in December 1991. The text fulfilled all aspects of the Uruguay Round with one exception: the list of obligations to cut import taxes and open up their service markets (see also GATS , General Agreement on Trade in Services ). The draft became the basis for the final decision.
In July 1993, the US, Japan, the EU and Canada announced that important progress had been made in tariff negotiations in related areas (market access). It was not until December 15, 1993, that every problem was resolved and negotiations on market access for goods and services ended. The agreement was signed on April 15, 1994 in Marrakech (Morocco) by the representatives of the 123 participating states.
The Doha Round is a package of contracts that the economics and trade ministers of the WTO member states should work on at their fourth conference in Doha in 2001 and complete by 2005. After several rounds of negotiations, the Doha Round has been considered a failure since 2016.
The actions agreed in the general tariff and trade agreement were only a temporary measure. Nevertheless, the liberalization of world trade could be promoted and secured for 47 years. The ongoing minimization of tariffs stimulated very high growth rates in world trade between the 1950s and 1960s. As a result, an average growth of 8% per year could be achieved. During the GATT era, trade liberalization outpaced production growth. The stability of this trading system has resulted in an increase in membership since the Uruguay Round . The reforms brought about a sustainable improvement and development of international economic and trade relations.
For the establishment of the WTO, the achievements of the GATT negotiations were used as an umbrella agreement and are still in place today. The GATT regulations consist of the original treaties from 1947 (GATT 1947), the updated statutes of the Uruguay Round and the final amendments from 1994 ((GATT 1994), Marrakech). Today the WTO controls the international trade in goods.
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