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©2009PearsonEducation,IncpublishingasPrenticeHall7-1CHAPTER7TRADEINGOODS©2009PearsonEducation,IncpublishingasPrenticeHall7-2CHAPTER7TRADEINGOODSTopicsforthischapter:HistoryofContemporaryInternationalTradeLawTheWorldTradeOrganizationThe1994GeneralAgreementonTariffsandTradeMultilateralTradeAgreementsPearsonEducation,IncpublishingasPrenticeHall©20097-3HistoryofContemporaryInternationalTradeLawDuringthepastsixdecades,therehasbeenamovementawayfromtariffsandquotasandtowardfreetradeamongnations.Therehasbeenashiftawayfromprotectingone’sownbusinessestowardmultilateraleffortstoreducetariffsandothertradebarriers.PearsonEducation,IncpublishingasPrenticeHall©20097-4ProtectionismTheUSraisedtariffsonmorethan900itemsin1930andmajortradingnationsreciprocatedwithsimilarincreases.RooseveltadvocatedloweringtariffsaspartofhisrecoveryplanfromtheGreatDepression.Startingin1934,theUSenteredintobilateraltradenegotiationstomutuallylowertariffs.TheendofWWIIledtoanintegratedinternationalsystemtoencouragetradeliberalizationandmultilateraleconomiccooperation.PearsonEducation,IncpublishingasPrenticeHall©20097-5TheBrettonWoodsSystemPearsonEducation,IncpublishingasPrenticeHall©20097-6TheBrettonWoodsSystemWassupposedtocreateasystemthatwouldpromotetradeliberalizationandmultilateraleconomiccooperation.Intendedtocreateamultilateralinstitutionalframeworkofrulesandobligationsthroughthreeorganizations:•InternationalMonetaryFund(IMF)•InternationalBankofReconstructionandDev.(IBRD)•InternationalTradeOrganization(ITO)ITOcharterneversubmittedbyPres.TrumantoSenateforconfirmationduetofearthatitwouldbedefeated,harmingU.S.foreignrelations.PearsonEducation,IncpublishingasPrenticeHall©20097-7The1947GeneralAgreementonTariffsandTradeInsteadoftheITO,thedevelopedmarket-economycountriesenteredintotheGeneralAgreementonTariffsandTrade(GATT)1947,amultilateralagreementthatsetouttherulesunderwhichthecontractingstateswerecommittedtonegotiatereductionsincustomstariffsandotherimpedimentstointernationaltradeingoods.GATT1947cametogovernalmostalloftheworld’strade.PearsonEducation,IncpublishingasPrenticeHall©20097-8MainPrinciplesofGATT19471.Tradediscriminationforbidden.Eachstatehadtoaffordmost-favored-nationstatustoallothercontractingstatesequally;foreigngoodstreatedthesameasdomesticgoodsaccordingtothenationaltreatmentprinciple.•Most-favored-nationstatus:WhenaGATTmembernationsetsafavorabletariffrateonaparticulartypeofgoodsimportedfromoneGATTmember,thesametariffratemustbesetonthosegoodsforotherGATTnations.PearsonEducation,IncpublishingasPrenticeHall©20097-9MainPrinciplesofGATT1947•Nationaltreatmentprinciple:Oncegoodsarelegallyimported,theymustbetreatedthesamewayasdomesticgoods.2.Onlybarriersthatonecontractingstatecouldusetolimittheimportationofgoodsfromanothercontractingstatewerecustomstariffs.3.Thetraderegulationsofcontractingstateshadtobetransparent.•Transparent:traderegulationsGATTmembersmustbepublishedandavailabletomembers.PearsonEducation,IncpublishingasPrenticeHall©20097-10MainPrinciplesofGATT19474.Customsunionsandfreetradeagreementsbetweencontractingstateswereacceptableforliberalizingtradesolongastheydidnotdiscriminateagainstthird-partyGATTstates.5.GATTstateswereonlyallowedcertainchargesonimportedgoods:a)Importtaxequaltointernaltaxesb)Antidumpingdutiesc)Countervailingdutiestocounteractforeignexportdutiesd)FeesandproperchargesforservicesrenderedPearsonEducation,IncpublishingasPrenticeHall©20097-11MultilateralTradeNegotiationsToupdateGATT1947,contractingpartiesparticipatedinmultilateraltradenegotiations(MTNs),whichareknownasrounds.Thefirstfiveroundsweremostlydevotedtoreducingtariffs.Thelastthreecompletedroundsexpandedtohandlenon-tariffmatters.Theeightroundswere:1.Geneva19472.Annecy,France(1949)3.Torquay,England(1950-1951)PearsonEducation,IncpublishingasPrenticeHall©20097-12MultilateralTradeNegotiations4.Geneva(1955-1956)5.DillonRound–Geneva(1961-1962)6.KennedyRound–Geneva(1964-1967)•EstablishedthepracticeofsettinganagendaanddefiningthetechniquesforGATTnegotiations.•Declaredacrosstheboardtariffreductions.•Alloweddevelopingstatestonotexercisereciprocitywithdevelopedstates.•Producedagreementonantidumping.PearsonEducation,IncpublishingasPrenticeHall©20097-13MultilateralTradeNegotiations7.TokyoRound–Geneva(1973-1979)•Producedseveralspecialagreements(codes)•Customsvaluation•Subsidiesandcountervailingmeasures•Antidumping•Standards•Importlicensing•GovernmentprocurementPearsonEducation,IncpublishingasPrenticeHall©20097-14MultilateralTradeNegotiations7.TokyoRound(continued)•Alsoreachedagreementsinthreespecialsectors:•Civilaircraft•Dairyproducts•Bovinemeat8.UruguayRound–infourcities(1986-1994)•EstablishedtheWorldTradeOrganizationMeatproductionandexportationhasbeenanissueatmanysessionsofthreedifferentrounds.Photo:©KarissaHambletPearsonEducation,IncpublishingasPrenticeHall©20097-15Ex.7-2ResultsoftheUruguayRoundMultilateralTradeAgreementsbindingonallmembers.PlurilateralTradeAgreementsonlybindingonstateswhoaccept.PearsonEducation,IncpublishingasPrenticeHall©20097-16TheW
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