The General Agreement on Tariffs and Trade Word Trade Organization

The General Agreement on Tariffs and Trade (GATT) is an international treaty designed to promote world trade by reducing tariffs and other international trade barriers. There have been eight rounds of GATT talks since its inception in 1948, in which member nations reassess trade barriers and set new rules for international trade. The first seven rounds of negotiations reduced average worldwide tariffs on manufactured goods from 45 per cent to around 4 per cent in industrial countries.

The most recent GATT round, the Uruguay round, ended in 1993. Although the benefits of the Uruguay round will not be felt for many years, the new accord should promote robust long-term global trade growth. It reduces the world's remaining manufactured goods tariffs by 30 per cent, which could boost global merchandise trade by up to 10 per cent, or $270 billion in current US dollars, by the year 2002.

The Uruguay round did much more than cut tariffs on goods. It heralded a big institutional change, creating the World Trade Organization (WTO) as a successor to GATT. WTO now boasts 132 members. It also introduced three big changes to world trade rules. First, it began to open up the most heavily protected industries: agriculture and textiles. Second, it vastly extended the scope of international trade rules to cover services as well as goods. New issues, such as the use of spurious technical barriers and health regulations to keep out imports and the protection of foreigners' 'intellectual property', such as patents and copyright, were addressed for the first time.

The third big change brought by the Uruguay round was the creation of a new system for settling disputes. In the past, countries could (and sometimes did) break (5ATT rules with impunity. Under the new system, decisions can be blocked only by a consensus of WTO members. Once found guilty of breaking the rules, and sifter appeal, countries are supposed to mend their ways. Under the WTO international trade issues continue to be addressed. As the new WTO builds up its credibility, more and more countries, including China, arc wanting to join/'

embargo

A ban on the import of a certain product.

exchange controls Government limits on the amount of its country K foreign exchange smith other countries and on its exchange rate against other currencies.

non-tariff trade barriers Non-mrmetary barriers to foreign products, such UK biases against a foreign company's bidn or product standards that go against «foreign company's product features.

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