Short Essay on the Uruguay Round and WTO

The Eighth Gatt round (i.e., the Uruguay Round was launched at Punta Del Este in September 1986 and concluded in Geneva on December 15, 1993. The comprehensive document (carrying more than 22000 pages and weighing 175 kg) was prepared by Mr. Arthur Dunkel, then Director General of GATT, and submitted on December 20, 1991.

The Final Act was signed by 125 countries including India in Marrakesh (Morocco) on April 15, 1994. The Final Act embodied the General Agreement on Tariffs and Trade (GATT) as well as 4wo other documents, i.e. (a) list of commitments by individual countries to reduce or eliminate tariffs and other barriers, and (b) pledges to open up trade in services.

Uruguay round of negotiations was the most embitious and complex so far. They covered not only traditional GATT sects such as tariff and non-tariff measures and the improvement of GATT rules and disciplines on subsidies, safeguards, etc. but also extended to new areas not dealt with by GATT earlier, such as Trade Related Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMs) and Trade in Services.

Features of Uruguay Round:

The following are the main results of the Uruguay Round as contained in the Final Act:

1. Market Access:

This is the backbone of the Act. Countries have pledged to cut tariffs on industrial and farm goods by an average of about 37%. The U.S.A. and European Community have agreed to reduce tariffs between them by one half.

2. Services:

For the first time, rules will govern an estimated $ 4 billion annual trade in services like banking insurance and travel, as well as the movement of labour. However, only minimum market liberalisation commitments were made.

3. Agriculture:

Also for the first time, agriculture has been folded into GATT. The accord (a) converts all non-tariff barriers, like quotas, into tariffs, which are reduced by 36% for industrialised countries and 24% for poor nations.

The cuts will be implemented over six years for rich countries and 10 years for others; (b) forces countries with closed farm markets to impart at least 3% of domestic consumption of the product, rising to 5% over six years; (c) cuts trade-distorting support for farmers by 20% over six years in rich countries and 13.3% for developing world; (d) cuts the value of direct export subsidies by 36% over six years and volume by 21%; (e) exempts the poorest nations from farm reforms.

4. Textiles:

Import quotas on textiles and clothing, in place under the Multi-fiber Arrangement (MFA) since 1974, will be phased out over 10 years.

5. Anti-Dumping Rules:

Rules on anti-dumping-imports prices below their value in the domestic market have been clarified.

6. Intellectual Property:

The treaty toughens up protection for patents, copyrights, rights of performers and producers to sound recordings, trademarks, and labels of origin.

7. World trade Organisation (WTO):

The treaty paved the way for the setting up of the World Trade Organisation (WTO) with effect from January 1995. In this way, GATT will be transformed into a permanent watchdog, WTO, with status equal to the IMF and World Bank.

The WTO will oversee a comprehensive set of rules and disciplines covering every aspect of world commerce, including trade in services and intellectual property protection. In addition, it will have a dispute settlement system to ensure adequate redress for bilateral trade problems.

8. Preparatory Committee (Prepcom):

Decision was taken for the establishment of Preparatory Commit­tee (Prepcom) for WTO with the GATT Director General Mr. Peter Sutherland being its chairman. All the existing members of GATT would be members in the body that would draw the outline for the WTO.

9. Social Issues:

Controversial social issues like labour standards, environment, and immigration did not figure in the Marrakesh Declaration. But, they were included as issues which would be debated at the Preparatory Committee set up for creating the WTO.