(1998; 97 pages) [French] [Spanish]
The results of the Uruguay Round: strengthening and enlargement of the multilateral trade system
Strengthening: with the creation of the WTO, a fully fledged international organization with international legal status, its own governing bodies, and rights and obligations came into being.
Enlargement: this resulted from the introduction of new areas covered by multilateral trade agreements such as services (GATS*)and intellectual property, as well as a more extensive application in the area of agriculture and textiles.
The result of the Uruguay Round is a framework convention, the Agreement establishing the WTO, under which come a variety of multilateral and plurilateral sectoral conventions. Signature of the WTO convention means adhering to all the multilateral conventions (multilateral agreements on trade in goods, General Agreement on Trade in Services, and Agreement on Trade-Related Aspects of Intellectual Property Rights), whereas adhesion to the plurilateral conventions is optional (aeronautics and government procurement).
A certain number of simple basic principles run through all the instruments, which together make up the multilateral trading system.
Trade without discrimination
In accordance with the well-known “most-favoured-nation” clause (MFN), Members are bound to grant other Members’ products treatment that is no less favourable than the treatment they accord to the products of any other country. Thus, no country can accord special trade advantages to another or discriminate between other countries: all countries are on an equal footing and all share in the benefits deriving from a reduction in the obstacles to trade. Customs unions and free trade areas are the exceptions that are officially authorized (Article XXIV of the GATT of 1947). An Enabling Clause dating from 1979 provides a permanent legal basis for special and differential treatment in favour of developing countries in the area of trade in goods.
A second form of non-discrimination, which comes under the heading of “national treatment”, provides that once products have entered a market, they should not be subjected to treatment less favourable than that accorded to like products of national origin.
Predictable and growing access to markets
The security and predictability of access to markets depends to a large extent on the use that is made of customs duties. While quotas are prohibited on the whole, customs duties are permitted in the WTO regime and are commonly used by governments to protect national production and to raise revenue. They are, however, subject to certain rules - for example, they must not discriminate between imports - and are to a large extent “bound”. Having bound a given customs duty for a specific product, a country may no longer raise it unless compensation is negotiated with the principal suppliers of that product.
The key to the predictability of a trade system often lies in the transparency of national legislation, regulations and practices. Several of the WTO agreements contain provisions in this respect. These aim to ensure transparency at the national or multilateral levels by means of formal notifications that must be addressed to the WTO.
Promoting fair competition
The WTO is not a “free trade” institution, as it is sometimes thought to be, if only because it authorizes the imposition of customs duties and, in limited circumstances, of other forms of protection. It is more accurate to say that it reflects a system of rules designed to ensure free competition that is open and without distortions. The rules on non-discrimination are aimed at ensuring conditions for fair competition, as are the rules on dumping and on subsidies. The GATT rules that defined the conditions in which governments could impose countervailing measures to these two forms of “unfair” competition have been expanded and are set out specifically in the WTO agreements.
Encouraging development and economic reforms
More than three-quarters of the WTO’s Members are developing countries and countries in transition towards a market economy. During the eight years of the Uruguay Round - from 1986 to 1994 - more than 60 of these countries implemented programmes to liberalize trade, sometimes as part of their negotiations to join the GATT, and in some cases independently. At the same time, developing countries and the economies in transition began to play a much more active and influential role in the Uruguay Round negotiations than they did in earlier rounds of negotiations.
The provisions of the GATT of 1947 that were intended to favour developing countries remain in place in the framework of the WTO. In particular, Part IV of the GATT of 1994* contains three articles, introduced in 1965. These encourage industrialized countries to assist developing countries “as a matter of conscious and purposeful effort” in their trading activities, and not to expect reciprocity for concessions accorded to developing countries that are inconsistent with their trade development and financial needs.