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5.2.1GATT/WTO

P2Asweanalyzedabove,wefindthefreetradeisthefirstbestpolicywhiletheprotectionproposalisthesecondbestaccordingtotradetheories.Infact,freetradeandprotectivetradearebothnotneutralbecausetheybothconferbenefitstosomegroupsandmakeotherssuffered.Anationwillfaceadilemma,howtobenefitfromtradeandprotectdomesticmarketatthesametime?Arrangedliberalizationisacompromise/'k?mpr?ma?z/thatcanachievethebothgoals.

Ifthetradingpartnersnegotiateandopendomesticmarketstepbystepintheworldwidescope,itisformingamultilateraltradingsystem,whichisembodiedbyGATTandsubsequentWTO.Ifitproceedsinregionalarea,itisembodiedbyregionalarrangements,suchasEUandNAFTA,

P3let’sstartwithGATT/WTO,anddiscusstheregionalarrangementslater.

P4theformationofGATTattributestotheUnitedStates’advocateandefforts.Formostofthelast100years,theUnitedStateshasenteredintotradenegotiationsbaseduponthebeliefthatopenmarketsfosterdemocracywhichinturnsupportsthemaintenanceofworldpeace.

Infact,tradepolicyhasbeenabedrock/'bedr?k/ofU.S.foreignpolicydatingfromtheSecondWorldWar.

P5Astheinaugural/?'n??gj?r(?)l/primeministeroftheUnitedKingdom,Mr.WinstonChurchillsaidin1941thathehadasecretmeetingwithPresidentRoosevelt/'r?uz?velt/andreachedtheAtlanticCharter,whichstatedthepostwaraims.

P6thepostwarcooperationisbasedonthemiserablelessonsfromtheGreatDepressioninthe1930s,whichsetoffaviciousspiraloftraderetaliationthatsawtwo-thirdsofworldtradewipedout,worsenedunemployment,andeventuallycontributedtotheoutbreakofdevastatingwar.

TheseincludedtheUnitedStates’Smoot-Hawleytariffsin1929which,triggeredan“outburstoftariff-makingactivityinothercountries.”TheUnitedKingdomrespondedwithemergencytariffsin1931andthe1932OttawaAgreementtodeependiscriminatoryimperialpreferenceswithitsdominions(principallyAustralia,Canada,NewZealandandSouthAfrica).Similarprotectionistanddiscriminatorytradepolicieswereadoptedbymanyothercountries.Theoutcomewasadramatic66percentdeclineinworldtradeby1933,whichaggravatedtheGreatDepressionandcontributedtotheSecondWorldWar.

Therecanbenodoubtthatin1941,boththeUnitedStatesandtheUnitedKingdomrecognizedtherelationshipbetweenglobaleconomiccollaboration,opentrade,andenduringpeaceandsecurity.

P7Furthermore,neithercountrywantedtorepeatthedisastrousglobalescalationof‘beggar-thy-neighbour’retaliatorytradebarriersofthe1920sand1930s.

Therecanbenodoubtthatin1941,boththeUnitedStatesandtheUnitedKingdomrecognizedtherelationshipbetweenglobaleconomiccollaboration,opentrade,andenduringpeaceandsecurity.

Thus,theglobalrulesthatunderpinthemultilateraleconomicsystemwerecreatedasadirectreactiontoWorldWarIIandadesireforenduringpeaceandsecurity.

P8Bothleadersdidnotwanttorepeaterrorsofthepast–wheretherelationshipbetweeninternationaleconomiccollaborationandpeaceandsecurityhadbeenignoredwithdisastrousconsequences.

Economiccollaborationthroughthepost-warinstitutions–thatintimewouldleadtotheInternationalMonetaryFund,theWorldBankandWorldTradeOrganization–wascriticaltoavoidingnewwars.

P10inchapteronewehavediscussedthenatureofmodernnationstate.onthisbasis,theobviouscourage,wasdemonstratedinleadersmakingpolitically-difficultconcessionsbeyondimmediateeconomicself-interesttoreachanagreementoflong-termbenefit.

Yetlong-termpeaceandsecuritywastheundeniabledrivingforcebehindthecreationofthepost-warmultilateraleconomicrulesandarchitecture.

Today,thevalueofglobaleconomicrulesisbeingquestioned.Thishasbeencoupledwithanincreaseinprotectionisttradebarriers.

Afteroverhalfacenturyofrelativepeace,thosebenefitseasilycouldbeforgottenintoday’sdebatesaboutglobalization.Yettheyareoneofthegreatestlegaciesofaremarkablebutfragilesystemofglobaleconomicarchitecture.

P11From1948to1994,theGATTprovidedtherulesformuchofworldtradeandpresidedoverperiodsthatsawsomeofthehighestgrowthratesininternationalcommerce.Itseemedwell-establishedbutthroughoutthose47years,itwasaprovisionalagreementandorganization.

In1995,withtheexpansionoftopicsandissues,theWTOwasestablishedwithreplacementofGATTandsuccessionofGATT.

FormGATTtoWTO,themultilateralsystemisexpandingandbecomecomplete.

P12TheWTO’screationon1January1995markedthebiggestreformofinternationaltradesincetheendoftheSecondWorldWar.WhereastheGATTmainlydealtwithtradeingoods,theWTOanditsagreementsalsocovertradeinservicesandintellectualproperty.ThebirthoftheWTOalsocreatednewproceduresforthesettlementofdisputes.

P13Asthetableshown,form1947tonow,GATTlaunched8roundsmultilateralnegotiationandWTOlaunchedoneround.Moreandmorenationsjoinedintothesystem,tariffhasbeenconcededtoaverylowlevelandnon-tariffbarriersarerestrictedbyrules.

P14whatareitsfunctions?

GATT/WTOprovidesaforumfornegotiationsamongmembersconcerningtheirmultilateraltraderelationsandmakeseffortstoreachagreements.

Reachingagreementsisnotthefinalpurpose,itisveryimportanttomonitortheimplementationofagreements.

Atthesametime,WTOhasestablishedanofficialbodytohandletradedisputesamongmembernations,whichwillensureinternationaltradeinpredictablecircumstances.TheWTO’sprocedureforresolvingtradequarrelsundertheDisputeSettlementUnderstandingisvitalforenforcingtherulesandthereforeforensuringthattradeflowssmoothly.CountriesbringdisputestotheWTOiftheythinktheirrightsundertheagreementsarebeinginfringed.AtthebeginningofSino-UStradewar,theUnitedStatesandChinabothsubmittedtheircomplainttoWTO.

WTOsetupatradereviewbodytosuperviseiftradepoliciesofmembernationsviolateWTOrules.

WTOalsoplaysanimportantroleintheglobaleconomicgovernanceandcooperateswithIMFandWorldBank.TheWTOmaintainsregulardialoguewithnon-governmentalorganizations,parliamentarians,otherinternationalorganizations,themediaandthegeneralpubliconvariousaspectsoftheWTOandtheongoingDohanegotiations,withtheaimofenhancingcooperationandincreasingawarenessofWTOactivities.

P15Inspiteofthosefunctions,WTOcommitsto

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