General Agreement on Tariffs and Trade

The General Agreement one Tariffs and Trade (GATT), in French General Agreement on Tariffs and Trade , was signed the 30 October 1947 to harmonize the customs policies of the signatory parties. The treaty came into effect in January 1948.

It is a multilateral agreement of Libre-échange which overall is supposed cause a drop in the Prix for the Consommateur S, to better use the factors of production, to support the Emploi in the sectors where each country holds a comparative Avantage.

One of the last cycles of Negotiation S (the Uruguay Round, of 1986 with 1994), closed by the Agreement of Marrakech, leads to the creation of the World Trade organization.

Goal

GATT aimed at founding by convention “a liberal code of conduct” and multilateral.

The main aim of the agreement was the freedom of the exchanges by the lowering of the Customs duties and the reduction of the quantitative or qualitative restrictions on the exchange S.

The principles implemented by GATT are to be brought closer to those which guided the action of the Fonds International currency (the IMF) and to the the World Bank as regards economic orthodoxy and to development policy.

Context

With leaving the Second world war, the charter of the United Nations (UNO) is signed in 1945 with San Francisco. Learning the lessons from the impotence of the Company of the Nations (SDN), disorders economic S of the Inter-war period, in particular of the Economic crisis of 1929 (the Great Depression), it pays much more attention to the international Coopération economic.

Chapters IX and X of the Charter affirm even the need for creating the international tools to develop this Coopération.

In fact the Accords of Bretton Woods in July 1944 will fix the rules of the game monetarist between the countries by creating the the IMF, which will be followed by creation in December 1945 of the international Banque for the rebuilding and the development (BIRD). In 1947, the International Conference on the trade and the use of Havana will give place to the signature of the Charte of Havana instituting the International organization the commercial (OIC). Attempt fallen through because of the refusal of the Congress of the the United States to ratify it.

The first round of GATT was signed by 23 states taken along by the the United States.

Principles

Concrete rules

the freedom of the exchanges by lowering of the Customs duties and reduction of the quantitative or qualitative restrictions on the exchange S. the customs duties must be the only means of Protection but the signatories fix themselves as objective to gradually reduce them on the basis of reciprocity.

the consolidation : once fixed, the customs tariffs cannot be increased any more, except case of Clause of safeguard, without compensation near the commercial Partenaire S.

the principle of non-discrimination and reciprocity : Clause of the most favoured nation, non-discrimination enters the Exportateur S foreigners and the producing S nationals (phenomenon called “national treatment”).

the clause of most favoured nation (NPF) : a country which grants a commercial advantage to another country must immediately extend it to the countries signatories of the agreement.

the clause of the national treatment : each country is committed applying the same rules (taxation, standards) to its territory to the level of the foreign products and companies that to the level of the national products and companies.

the principle of the prohibition of the quantitative restrictions . It relates as well to the imports as on exports: fixing of quotas (fixing of quotas or quotas) are prohibited
the principle of the prohibition of the dumping and the export subsidies . These last prohibited for the industrial products but nevertheless are tolerated for the basic commodities, except if they lead a State to hold a dominant position on the market concerned.

the settlement of the disputes : GATT by amicable agreement privileged the payments by a conciliation procedure, In the event of failure, the parts were to be subjected to the conclusions of a “panel”, with as a last resort the authorization to set up retaliatory measures if the country losing did not conform to the conclusions of the panel.

Exceptions

Many exemptions are envisaged in the general agreement, thus limiting the range even basic principles. One can in particular quote:

article XII which authorizes the quantitative restrictions either in the event of serious deficit of the balance of payments, or within the framework of a policy of resorption of the agricultural surpluses, or to avoid a serious injury caused by a big raise of the imports.

the generalized system of preferences (SGP), possibility for the countries developed to promote exports of certain industrial products of the developing countries (PED), without having applied the clause of the most favoured nation to the other countries (see above).

the safeguard clause , which recognizes with the developing countries the possibility of raising their customs duties in order to protect the emergent industries.

the multifibre agreement , agreement concluded in 1974 between the DEVELOPING COUNTRIES and developed countries fixing from the quotas from exports, by country and products, in the field of the textile and clothing. This agreement aims at protecting textile industries from the countries developed of the competition of the countries with low wages.

article XXIV which lays down the possibility of founding free exchange zones or of customs union , in condition however that preferably does not create an obstacle nor with regard to third countries and that the internal barriers with these commercial blocks are completely removed for all the exchanges.

Customs duty: exemptions were possible with the principles of GATT but were to be approved in the majority of the 2/3.

Negotiation cycles

GATT was a certain success since in eight cycles of Négociation, one passed from 23 country in 1947 to 120 countries signatories to the end of the year 1994.

These cycles are generally indicated by the name of the city where they were opened, by the country to which this city belongs, or by names of political officials.

Of 1947 with 1962, the first 5 cycles of negotiation especially produced agreements of reduction of the Customs duties: cycle of Geneva (1947), cycle of Annecy (1949), cycle of Torquay (1951), another cycle of Geneva (1956) and Dillon Round (1960 - 1961).

Of 1964 with 1994 the last 3 cycles of negotiation (Kennedy Round, of May 1964 at June 1967, Tokyo Round of September 1973 at April 1979, Uruguay Round of September 1986 at April 1994) saw increasing the number of countries signatories, and at the same time extending the field from the Négociation S.

The Uruguay round longest and the most were discussed of the negotiation cycles. In addition to a new reduction of the customs tariffs, were negotiated an agreement to the nontariff measures, the Agriculture, the services, the Intellectual property, the system preferably generalized for the Pays in the process of development.

In November 2001 opened the Cycle of Doha, with the Qatar, (which should have been completed the January 2005) and which primarily aimed at improving the access for the Developing country (the DEVELOPING COUNTRIES) to the markets of the developed countries. All in all, this " round" was a failure.

Managing director

The function of managing director was creates in 1965, but the position of secretary general which existed since 1948 can be regarded as its equivalent:

Eric Wyndham White (1965 - 1968)
Long Olivier (1968 - 1980)
Arthur Dunkel (1980 - 1993)
Peter Sutherland (1993 - 1994), which is also the first director of the World Trade organization (OMC)

Birth of OMC

System GATT of 1947 remained a political system and not true a International organization: little structure (only one Safety and Health Committee - the secretariat with Geneva), not of international Personality legal, of the too many exemptions, which finally amounted for the State S contractors (one did not speak about Member States) adhering to “GATT with the chart” according to its interests of the moment and, sometimes, to abstain from respecting the guiding principles (like the Clause of the “most favoured nation”) with the liking of the political orientations and commercial national.

These defects were partly corrected by the Accords of Marrakech instituting OMC. In April 1994 the State S members sign the founding document of OMC.

Critics of GATT

For its detractors, system GATT, or OMC, remains too much focused on the liberalization of the International business, and this in spite of the last evolutions relative to the other elements of the economy like the integration of the Civil society, the establishment of environmental Réglementation S, on the Santé or the Work conditions. In addition, one of principal criticisms which could be made by the altermondialists is due to the inequality of Influence license between the richest countries and the others. The weight of the political orientations of the developed Pays remains undeniable. Indeed, to require of countries with the fragile economy to open their Marché S in an asymmetrical way makes initially the play of the interests of the great powers and the Multinationale S, in particular without liberalization with low added-value, which are the fields where the the least developed countries would be most powerful, while allowing the Pays developed S in particular to maintain subsidies for the Agriculture.

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