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Chapter 10.docx

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Department
Commerce
Course
COMMERCE 4SA3
Professor
sfs
Semester
Summer

Description
IB Chapter 10 International Cooperation among NationsThe General Agreements on Tariffs and Trade and the WTO ITOs mission was to promote international trade ITO never came into being instead GATT General Agreements on Tariffs and Trade was createdProvided a form for trade ministers to discuss policies and problems of common concernThe Role of the GATT Goal to promote a free and competitive international trading environment benefiting efficient producers an objective supported by MNCs Sponsored multinational negotiations to reduce tariffs quotas and other nontariff barriers GATT negotiations led to dramatic growth in world trade since end of WWII Most favour nation MFN principle requires that preferential treatment granted to one country must be extended to all countries Eg US cut tariff imports of British trucks 20 it also had to reduce tariffs from all other members by 20 2 important exceptionsTo assists poorer countries in economic development efforts the GATT permitted members to lower tariffs to developing countries without lowering them for more developed countries US called them the generalized system of preferences increase pressures on domestic firms that are vulnerable to import competition from the developing countriesComprehensive trade agreements that promote economic trade integration eg EU NAFTA Permitted countries to protect their domestic industries on a nondiscriminatory basis Restricted to use of tariffs only but quotas and nontariff barriers were still created despite membership to GATT Exemptions for national security and to remedy BOP problems Can protect against too much foreign competition Continued to decline tariffs but nontariffs barriers were the underlying issue GATT took action Last meeting at Uruguay created the WTO more power than GATTThe WTO 1995 in Geneva 153 members 30 observer requirements Members must open to trade and obey rules 3 goalsPromote trade flows by encouraging nations to adopt nondiscriminatory predictable trade policiesReduce remaining trade barriers through multilateral negotiationsEstablish impartial procedures for resolving trade disputes among members Gatt incorporated into WTO different in 2 important waysGATT focused on promoting trade in goods WTO mandated it should be broader Eg services knowledge investmentsEnforcement powers are strongerProblem Sectors 1 Dealing with sectors of the economy that receive government protection 2 Agricultural and textile sectors distorted by export subsidies restrictions etc
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