Agenda for future multilateral trade negotiations: traditional and new issues

Abstract

Introduction: General Agreement on Tariffs and Trade(GATT) was signed at the Geneva conference in 1947. It came into effect on 1 January 1948.After nearly five decades of its existence, GATT made way to the formation of the World Trade Organization(WTO) on January 1,1995. GATT was a multilateral trade agreement that set rules of conduct for international trade relations and provided a forum for multilateral negotiations regarding the solution of trade problems and the gradual elimination of tariffs and other non tariff barriers of trade. The agreement was based largely upon principles of non-discrimination and reciprocity so as to liberalize trade. With the exception of Custom Unions and Free Trade Areas (FTAs),all contracting parties were generally bound by the agreement's Most Favoured Nation (MFN)Clause. Protection were to be given to domestic industries through custom tariffs, thereby prohibiting import quotas and other restrictive trade practices. The agreement also provided for the binding of the tariff levels negotiated among member countries and established a framework for the settlement of grievances put forward by members who argued that their rights, under the terms of agreement, had been violated or compromised by other members trade practices. Eight rounds of trade negotiations were held under the aegis of GATT, the last being the most ambitious one i.e., the Uruguay Round (UR). UR negotiations was concerned both with old issues such as unfinished business of previous GATT rounds and with grievances accumulated over the years and new issues such as trade in services, the protection of intellectual property rights, trade in agriculture and trade related investment measures. Until the Uruguay round of multilateral trade negotiations, the developing countries were generally observers.They benefited as "free riders" from whatever reductions in trade barriers were negotiated among developed countries,while simultaneously they argued for,and to some degree received,special and differentialtreatment(S&D),both through the Generalized System of Preferences(GSP) and through the automaticity with which the balance of payments exception was used to permit them to continue reliance upon quantitative restrictions. All that changed with the conclusion of the eight and the most ambitious multilateral trade negotiation -the Uruguay Round on April 15,1994. By that time many policy makers and development economists had become convinced that the highly protectionist policies followed by developing countries in the name of import substitution were inimical to sustained economic growth,and the outer oriented policies and integration with the international economy offered a better hope for rapid development. Sachs and Warner(1995) extensive study has shown that trade boosts economic growth. It is argued that developing countries achieved some considerable gains by participating in the round. The first WTO Ministerial Conference was held in Singapore in December 1996.The Second Ministerial Conference, held in Geneva in May 1998, carried forward the results of the Singapore Ministerial meeting and established the work programme to examine trade -related issues involving global electronic commerce. Attention was paid to preparations for the negotiations mandated under the Uruguay Round built –in agenda. There was an ongoing interaction among the WTO members as follow-up of the two ministerial meetings and for the preparation for the Third Ministerial Conference to be held in Seattle from November 30 to December 3,1999. This conference was expected to launch a new round of multilateral trade negotiations to begin in 2000(millennium round). This new round was to be devoted to items on the Uruguay built in agenda together with new issues to be decided upon. This paper will discuss the new and old provisions of the GATT and the WTO. Further it will examine the importance of such provisions and suggest ways and means for making them more relevant and beneficial for all members of the WTO.The paper is organized in the following manner. Section I will deal with the new issues.Section II will discuss the traditional issues and the concerns of the developing countries. The last section will give conclusions. Show more