Topic 9. The last rounds of negotiation of GATT: Tokyo and Uruguay. The appearance of WTO 9.

1 The results of the Tokyo round of negotiations in the framework of GATT (1973-1979) 9.2 The results of the Uruguay round of negotiations in the framework of GATT (1986-1994). The creation of WTO

9.1 The results of the Tokyo round of negotiations in the framework of GATT (1973-1979) The initiative of the 7th round of negotiation belongs to USA, EEC and Japan. The main objective: Expanding and liberalizing the international trade and improving the institutional framework of international trade relations. The 28th Session of contracting parties from November 1972, created the Committee responsible for preparing the negotiations for Tokyo round. To this round were invited to participate also non-member countries of GATT. The official opening of Tokyo round in September 1973, 102 countries took part, among which 20 nonmember countries. The principles of the Tokyo round Developed countries should not claim complete reciprocity from developing countries regarding the concessions offered, To pay a special attention to products and sectors that are of a vital importance for developing countries and to adopt differentiated measures regarding these countries, that would ensure a preferential treatment when it is possible, To be sustained and improved the GSP To pay a special attention to developing countries situated on islands. Were created 6 groups and 8 subgroups of trade negotiations. The effective negotiations began only in February 1975 and lasted for about 5 years. In April 1979, the Committee for Commercial negotiation met in Geneva to approve agreements concluded among contracting parties, mainly developed states. The field in which the negotiations couldnt be ended in the April 1979, and was agreed to continue the negotiation until an agreements will be reached (end of the year), was the improving of the safeguarding clause, but it wasnt reached. The general results of this round allowed developing countries to play an increasing role in international trade. In the tariff field there were obtained tariff concessions on average till 35% for industrial products and till 41% for agricultural products. Developing countries offered customs concessions for a limited range of products, totaling the number of concessions and consolidations for imports of about $ 3,9 billion US. 1

The total amount of customs concessions and consolidations offered by developed countries accounted for $300 billion US. The results of the Tokyo round The Geneva Protocol 1979, came into force from 1.01.1980 31.12.1987. In the tariff sphere the reductions of the customs duties were applied to around 60% of the imports of industrial products and 30% of imports of agricultural products of the main industrialized countries and groups of countries (EEC, USA, Japan, Canada, Austria, Switzerland, Sweden, Norway and Finland). Also was signed an Agreement regarding the consolidation of customs duties for the majority of products, thus the reductions offered at GATT rounds cannot be withdrawn (canceled) unless equivalent facilities would be granted. Results in non-tariff domain The were signed a number of agreements and also were created some specialized committees for their administration, that foresee the mechanisms of consultations and regulations of disputes among contracting parties and a special and differentiated treatment for developing countries. Were negotiated 6 agreements in the sphere of non-tariff barriers. 1. The Agreement regarding customs valuation (Art. VII) Imposes a uniform regulation in the sphere of customs valuation. It defines a more equitable, uniform and impartial system of customs valuation of imported goods, that should be according to the reality and to exclude the use of some arbitrary values. 5 Methods of Customs valuation: 1. According to the value of transaction (invoice price); 2. According to the value of transaction with identical products; 3. According to the value of transaction with similar products; 4. Deducted value method based on the price of the imported identical or similar products; 5. Calculated value method. The Agreement also stipulated the creation of a Technical Committee subordinated to the Council of Customs Cooperation from Brussels. It entered into force on 1 January 1981. 2. The Governmental Procurement Agreement Agreement on state trade (Government Procurement) ensures an increasing international competition on the public markets. The stipulations of the agreement apply to acquisitions of values exceeding 150 000 SDR, or 195 thousands US $, that should be awarded by tenders at which should participate local and foreign suppliers. Together with the Agreement was negotiated the list of buyers that represent state authorities. Each country that wants to adhere to this agreement should present the list of buying entities. Developing countries in some cases, depending on their economic policy and their participation to different regional or international agreements, can make a derogation from the principles of the Code (NTC), in order to favor the internal suppliers or from other developing countries. Also, the Agreement foresees the creation of some informational centers in the favor of developing countries, as well as offering assistance in order to allow them to participate with offers at public tenders for governmental acquisitions. Was created a Committee for State Trade in order to solve the disputes among signing parties. 2

The Agreement entered into force on 1.01.1981. 3. Agreement on Import Licenses The Agreement recognizes the right of countries to impose some imports with special authorizations prior to imports, and has as a main aim the standardization and simplification the import authorization procedures, in order for them not to become barriers on imports. The Agreement has the following stipulations: the contracting parties engage to align the procedures of licensing and authorization to the GATT and its annexes and protocols, The rules on licensing should be neutral in their application and correctly and equitable administrated; - the rules and necessary information regarding the procedures of filling an application, including the requirements that persons, enterprises or institutions should meet in order to fill such applications, as well as the lists of the products supposed to licensing should be published in the shortest terms in order to allow governments and enterprises to know them in proper time; The forms for applications for import licensing and the corresponding procedures should be as simple as possible, and the applicant would address, deriving from possibilities, to one administrative body; - the length of validity of the import licenses will be reasonable and wont be too short, so not to disturb the effective carrying out of imports; - at import authorization distribution, it should be taken into consideration by the contracting parties, a reasonable allocation of licenses to new importers, and paying a special attention to goods originating from developing countries. For administration of the Agreement, was created the Committee for import authorizations. The Agreement entered into force on 1.01.1981. 4. The Agreement regarding export subsidies and countervailing measures Also called the Agreement regarding the interpretation and application of the articles VI, XVI and XXIII of GATT) specifies that the use of subsidies should not jeopardize the commercial interests of the contracting parties, and the countervailing measures should not hinder unjustified the international trade. The Agreement comprises the following most important stipulations: - the obligation of the contracting parties to notify GATT about granted export subsidies and the list of subsidized products; - forbidding the use by developed states of export subsidies for industrial products and limiting the use of export subsidies for primary products; - the use of export subsidies provided that they wont jeopardize the interests of other states; Recognizing the right of the developing countries to subsidize their export products, but with the obligation to gradually reduce and eliminate them. - The possibility of the importing country to apply the countervailing duty, with the obligation to prove previously the caused damage to internal production by the subsidized import. The Agreement defines better the damage, interpreting in a better way the GATT.

Also, it comprises detailed stipulations regarding the inspection procedures regarding the countervailing measures, as well as the obligation to start prior consultations with implied exporting countries before starting the investigation. Also it stipulates special procedures to regulate the disputes. In order to administrate the Agreement, was created the Committee to solve the disputes among contracting parties. It entered into force on 1.01.1980. 5. The Antidumping Code Also named the Agreement regarding the application of the art. VI of GATT, is a revised variant of the Antidumping code from Kennedy round, but it takes into account to a greater extent the situation and the problems specific for developing countries. The main objective of the code is to avoid the arbitrary use of antidumping tax. A product can be considered as being the object of the dumping, only if it is proved to be imported at lower than fair value price. The new code defines better the damage caused by the dumping import and implies the obligation to prove the damage to the importing country. Regarding the developing countries, the codes stipulates that it should be taken into consideration their specific situation, when it is intended to use the antidumping measures, to be explored all the possibilities of constructive solution, before applying antidumping duties. The code recognizes the principle according to which the comparison with internal prices of developing countries should not justify the initiation of antidumping investigation. Also the Code foresees that these countries are justified to receive technical assistance from GATT, regarding the interpretation and application of the Code. It entered into force on 1.01.1981. 6. The Agreement regarding the technical barriers to trade Named also the Normalization code, recognizes the importance of international standardization and certification systems in the increase of the efficiency of production and facilitating the international trade. It encourages the development of these systems, including the prescriptions for packing, labeling and marking, on condition that no unnecessary obstacles would be created. Was created a Committee for technical barriers to trade, that deals with consultations on any problems regarding the application of the agreement, promoting its objectives and solving disputes among contracting parties. It entered into force on 1.01.1980. Results in the sphere of trade with agricultural products Tokyo round had satisfactory results in comparison with previous rounds, concerning trade with agricultural products. All the agreements signed refer besides industrial products, to agricultural products as well. In the framework of the round were negotiated two international arrangements: 4

1) regarding beef meat (and live animals); 2) regarding dairy products, that entered into force on 1.01.1980, regarding the promotion and liberalization of trade with respective products. For managing these arrangements, were created: the International Meat Council and the International Council for Dairy products, that should periodically examine the way of applying the stipulations of these arrangements, should evaluate the demand and supply on the international market of meat and dairy products, and to propose respective measures and solutions in case of some disequilibrium, after consultations with contracting parties. Countries should report regularly to Councils all the necessary information regarding meat and dairy products, in order to determine correctly the situation on the world market of meat and dairy products. International trade with tropical products Negotiations on tropical products ended in 1976, achieving an average reduction of customs duties with 12%, as well as some concessions in the sphere of non-tariff barriers for around 300 finished products, semi-finished and primary products. The majority of these products were included in the preferential schemes of developed states. Starting with 1977, developed states applied the negotiated concessions. Legal framework of international trade Were adopted 5 agreements regarding: 1. Differentiated and more favorable treatment of developing countries. Reciprocity and more extended participation of developing countries (Abilitation clause) 2. Safeguard measures for developing. 3. The Declaration regarding the commercial measures for equilibrating the balance of payments. 4. Memorandum of Agreement regarding the notification, consultations, regulation of disputes and monitoring. 5. Memorandum of Agreement regarding the restrictions to exports. 9.2 The Results of the Uruguay round of negotiations (1986-1994) Even before applying the results of Tokyo round, was launched the idea of a new round of trade negotiations in the framework of GATT. (due to not reaching all the proposed objectives). The idea of new round 1982, at GATT ministerial meeting, and further in 1984 - 1985. Mainly USA and EEC and Japan proposed it. The official reason of USA to reverse the protectionist trend of trade policies. But in reality the main reason was due to huge deficit of trade balance and balance of payments. In october 1985 Took place a extraordinary session of contracting parties of GATT, that marked the initiation of the preparing of the new round. Until July 1986, the preparing Committee presented the project of the Declaration that was to be discussed and approved at the ministerial reunion of GATT that was programmed for September 1986. September1986 -Punta del Este (Uruguay) Official opening of VIII round of negotiations of GATT. Were present representatives of 74 contracting parties and 18 non-member and 21 of regional and international organizations, observers. Was adopted the Ministerial Declaration regarding Uruguay round" 5

Was created a Committee for Commercial negotiations to coordinate the activities of new round, the effective negotiations to start in 1987. The Declaration comprised 2 parts: 1. trade with goods, 2. trade with services. Objectives of the round - to ensure the liberalization and extension of world trade in favor of all countries, mainly least developed contracting parties, by reducing or eliminating customs duties, quantitative restrictions and other non-tariff barriers; - to strengthen the role of GATT, to improve the multilateral trading system based on GATT principles and rules; - to increase the possibilities of GATT system to adapt to the evolution of the international economic situation, mainly by facilitating the structural changes and the development of GATT relations with international organizations. To encourage the cooperation at the national and international level regarding trade policies, and other policies. Principles of negotiation: - transparent, opened negotiations in accordance with the objectives of GATT, in order to ensure the reciprocal advantages and benefits for all the participants; - launching, and applying the results of the negotiation would be considered the elements of a single action; - would be made efforts in order to equilibrate the concessions by sectors and trade domains in order to avoid the request of some unjustified inter-sectorial concessions; - contracting parties agree that the principle of differentiated and favorable treatment for developing countries should be at the basis of negotiations; - Developed countries should not claim reciprocity from developing countries, and wouldnt expect that developing countries would bring contributions that are incompatible with their stage of economic development. - Developing countries would increase the level of their concessions together with the increase of the level of their progressive development and improve of their situation; - a special attention should be granted to least developed countries; The principle of unique engagement, the countries either join all the agreements, decisions and declarations or none, and thus meaning withdrawal from GATT.