The General Agreement on Tariffs and Trade is a multi-national trade treaty. It has been updated in a series of global trade negotiations consisting of nine
rounds between 1947 and 1995. The "GATT's major intellectual architects" were the GATT lawyer
Ernst-Ulrich Petersmann,
Jan Tumlir, an economics professor at the
Geneva Graduate Institute, and the U.S. law professor
John Jackson. The GATT's role in international trade was largely succeeded in 1995 by the
World Trade Organization. During the 1940s, the United States sought to establish a set of post-war multilateral institutions, one of which would be devoted to the reconstruction of world trade. In 1945 and 1946, the U.S. took concrete steps to bring about such an organisation, proposing a conference to negotiate a charter for a trade organisation. From the outset,
government procurement was excluded from the scope of the agreement.
Annecy Round: 1949 The second round took place in 1949 in
Annecy, France. 13 countries took part in the round. The main focus of the talks was more tariff reductions, around 5,000 in total.
Torquay Round: 1951 The third round occurred in
Torquay, England, in 1951. Thirty-eight countries took part in the round. 8,700 tariff concessions were made totalling the remaining amount of tariffs to ¾ of the tariffs which were in effect in 1948. The contemporaneous rejection by the U.S. of the
Havana Charter signified the establishment of the GATT as a governing world body.
Geneva Round: 1955–1956 The fourth round returned to
Geneva in 1955 and lasted until May 1956. Twenty-six countries took part in the round. $2.5 billion in tariffs were eliminated or reduced.
Dillon Round: 1960–1962 The fifth round occurred once more in
Geneva and lasted from 1960 to 1962. The talks were named after U.S. Treasury Secretary and former Under Secretary of State
Douglas Dillon, who first proposed the talks. Twenty-six countries took part in the round. Along with reducing over $4.9 billion in tariffs, it also yielded discussion relating to the creation of the
European Economic Community (
EEC).
Kennedy Round: 1964–1967 The sixth round of GATT multilateral trade negotiations took place between 1964 and 1967. It was named after U.S. President
John F. Kennedy in recognition of his support for the reformulation of the United States trade agenda, which resulted in the Trade Expansion Act of 1962. This Act gave the President the widest-ever negotiating authority. As the Dillon Round went through the laborious process of item-by-item tariff negotiations, it became clear, long before the Round ended, that a more comprehensive approach was needed to deal with the emerging challenges resulting from the formation of the European Economic Community (EEC) and
EFTA, as well as Europe's re-emergence as a significant international trader more generally. Japan's high economic growth rate portended the major role it would play later as an exporter, but the focal point of the Kennedy Round always was the United States–EEC relationship. Indeed, there was an influential American view that saw what became the Kennedy Round as the start of a transatlantic partnership that might ultimately lead to a transatlantic economic community. To an extent, this view was shared in Europe, but the process of European unification created its own stresses under which the Kennedy Round at times became a secondary focus for the EEC. An example of this was the French veto in January 1963, before the round had even started, on membership by the United Kingdom. Another was the internal crisis of 1965, which ended in the Luxembourg Compromise. Preparations for the new round were immediately overshadowed by the Chicken War, an early sign of the impact variable levies under the Common Agricultural Policy would eventually have. Some participants in the Round had been concerned that the convening of
UNCTAD, scheduled for 1964, would result in further complications, but its impact on the actual negotiations was minimal.
In May 1963 Ministers reached agreement on three negotiating objectives for the round: • Measures for the expansion of trade of developing countries as a means of furthering their economic development, • Reduction or elimination of tariffs and other barriers to trade, and • Measures for access to markets for agricultural and other primary products. The working hypothesis for the tariff negotiations was a linear tariff cut of 50% with the smallest number of exceptions. A drawn-out argument developed about the trade effects a uniform linear cut would have on the dispersed rates (low and high tariffs quite far apart) of the United States as compared to the much more concentrated rates of the EEC which also tended to be in the lower held of United States tariff rates. The EEC accordingly argued for an evening-out or harmonisation of peaks and troughs through its cerement, double cart and thirty: ten proposals. Once negotiations had been joined, the lofty working hypothesis was soon undermined. The special-structure countries (Australia, Canada, New Zealand and South Africa), so called because their exports were dominated by raw materials and other primary commodities, negotiated their tariff reductions entirely through the item-by-item method. In the end, the result was an average 35% reduction in tariffs, except for textiles, chemicals, steel and other sensitive products; plus a 15% to 18% reduction in tariffs for agricultural and food products. In addition, the negotiations on chemicals led to a provisional agreement on the abolition of the American Selling Price (ASP). This was a method of valuing some chemicals used by the noted States for the imposition of import duties which gave domestic manufacturers a much higher level of protection than the tariff schedule indicated. However, this part of the outcome was disallowed by Congress, and the American Selling Price was not abolished until Congress adopted the results of the Tokyo Round. The results on agriculture overall were poor. The most notable achievement was agreement on a Memorandum of Agreement on Basic Elements for the Negotiation of a World Grants Arrangement, which eventually was rolled into a new International Grains Arrangement. The EEC claimed that for it the main result of the negotiations on agriculture was that they "greatly helped to define its own common policy". The developing countries, who played a minor role throughout the negotiations in this round, benefited nonetheless from substantial tariff cuts particularly in non-agricultural items of interest to them. Their main achievement at the time, however, was seen to be the adoption of Part IV of the GATT, which absolved them from according reciprocity to developed countries in trade negotiations. In the view of many developing countries, this was a direct result of the call at UNCTAD I for a better trade deal for them. There has been argument ever since whether this symbolic gesture was a victory for them, or whether it ensured their exclusion in the future from meaningful participation in the multilateral trading system. On the other hand, there was no doubt that the extension of the Long-Term Arrangement Regarding International Trade in Cotton Textiles, which later became the Multi-Fiber Arrangement, for three years until 1970 led to the longer-term impairment of export opportunities for developing countries. Another outcome of the Kennedy Round was the adoption of an Anti-dumping Code, which gave more precise guidance on the implementation of Article VI of the GATT. In particular, it sought to ensure speedy and fair investigations, and it imposed limits on the retrospective application of anti-dumping measures. $40 billion in tariffs were eliminated or reduced via the Kennedy Round.
Tokyo Round: 1973–1979 Reduced tariffs and established new regulations aimed at controlling the proliferation of non-tariff barriers and voluntary export restrictions. 102 countries took part in the round. Concessions were made on $19 billion worth of trade.
Formation of Quadrilateral Group: 1981 The
Quadrilateral Group was formed in 1982 by the
European Union, the United States, Japan and Canada, to influence the GATT.
Uruguay Round: 1986–1994 The
Uruguay Round began in 1986. It was the most ambitious round to date, as of 1986, hoping to expand the competence of the GATT to important new areas such as
services,
capital, intellectual property, textiles, and agriculture. 123 countries took part in the round. The
Uruguay Round was also the first set of multilateral trade negotiations in which developing countries had played an active role. Agriculture was essentially exempted from previous agreements as it was given special status in the areas of
import quotas and
export subsidies, with only mild caveats. However, by the time of the Uruguay round, many countries considered the exception of agriculture to be sufficiently glaring that they refused to sign a new deal without some movement on agricultural products. These fourteen countries came to be known as the "
Cairns Group", and included mostly small and medium-sized agricultural exporters such as Australia, Brazil, Canada,
Indonesia, and New Zealand. The Agreement on Agriculture of the Uruguay Round continues to be the most substantial
trade liberalisation agreement in agricultural products in the history of trade negotiations. The goals of the agreement were to improve market access for agricultural products, reduce domestic support of agriculture in the form of price-distorting
subsidies and quotas, eliminate over time export subsidies on agricultural products and to harmonise to the extent possible sanitary and phytosanitary measures between member countries. The principles and legal framework established by GATT did not become obsolete with the creation of the World Trade Organization (WTO) in 1995. Instead, they formed the substantive and institutional foundation for the expanded multilateral trading system. The landmark agreements negotiated during the Uruguay Round that created the WTO—particularly the
General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIMs)—were explicitly constructed upon core GATT disciplines. ==World Trade Organization==