TOP9 Multilateral Institutions

General Agreement on Tariffs and Trade

Regional and transcontinental trade was early connected to regulations and trades

Those who were arguing for free-trade based on comparative advantage e.g. David Ricardo (trade benefits every country if they focus on the goods with least opportunity costs) and those hwo favoured regulation of trade

Ater World War II (1947/1948) influenced by the beginning of US hegemony on the basis of its economic power

• tariffs and other trade barriers were high and blocked free-trade

In the following years the 23 members reduced the tariffs and other trade barriers extensively for the max of world trade and its economies

GATT tried to make a balance between principles of non-discrimination

• trade advantages have to include evry countrs

  • same tax levels for all members

• foreign goods are not allowed to be discriminated towards domastic

• reciprocity of trade concessions (like you do me, I do you)

And exceptions

• Developing countries were allowed to withdraw tariff restructions when it secures their domestic goods/industries -> import-Substitution

• Countries that managed to align in a free trade zone or a tariff union (e.g. EU) were allowed to ship around giving all the same advantages

Rounds negotiating abuut tariffs and other barriers

For most of its history, multilateral trade system was dominated by US and a handful of other developed countries ( the Quad: US,EU, Canada, Japan)

• decisions were negotiated in tiny groups and then extendet by shaping the agenda and direction of negotiating

• WTO is all in all a week institutions as the sovereignity is respected BUT GATT could have promoted regulations that support developmen countries - never happened

Kennedy Round (1963-67)

• tariffs for undustrial goods in industrialised countries were substantially lowered

• 62 members

• substantially lowered tariffs for indusrial goods in industrialised countries

  • developing countries didn’t produce a lot of industrialised products

Tokyo Round (1973-79)

• 102 Länder

• lowered tariffs up to 1/3

• managed to tackle non-tariff measures

  • technical standards for products

  • subsidies

• Still, industrialised countries managed able to protect some sectures (agriculture, textiles, iron and steel) especially Germany a normally liberal and pro free-trade country protected those areas through subsidies and non-tariff measures

1986-1994

Especially agriculture but also cultural goods as a controversial discussed topic

• USA <-> FR

tackled new issues like services, investment, and intellectual property rights

farreaching results

• General Agreement on Trade in Services (GATS) applied non-discrimination and national treatment to foreign providers of services (e.g. in the financial sector) Meistbegünstigung und Inländerprinzip

• Trade-Related Investment Measures (TRIM) were a first, but small step to liberalise the investment regime

  • applies only to investions that affect trade in goods (e.g. disturbing competition)

• Trade-Related Aspects of Intellectual Property Rights (TRIPs), e.g. patents and copyrights, were highly controversial, in particular with regard to pharmaceuticals.

• The World Trade Organisation (WTO) and a significant dispute settlement (Streitschlichtung) mechanism were established in 1994/95

2001, China (2001) and Russia (2012)

Hintergrund:

• One country has one vote and decisions are taken on a consensus basis so every country can become a veto-player

  • still decision-making is heavily shaped by power

• “Nothing is agreed until everything is agreed

Was driven by US and EU over substentail opposition from developing countries

• were promised that Doha Round would be a “development” round according to historical imbalances in the trading system and advancing their needs and interest

• Looked the same with informal negotiations of the Quad

Over the course a significant change

WTO experiences substential shift in power by the appearance of those countries and their stunning developement

Brazil, India, China

• 2004 Brazil and India displace Canda and Japan from the inner circle of WTO negotiations

• China in 2008

• emerged as pivotal actors

  • managed to buil an influentail and strategic power alliance with a strong collective identity based on the threat they faced from the established powers

    • G20-T (B and I, backed by C) and G33 (India, backed by C)

      • South who doesn’t want to be underminded by the North

      • have differing political and economic interests than the Global North

  • Raised a voice for developing countries and were able to unbalance decisions in internal trade governance especialle BCI transformed the Doha round into a Nort-South battle

  • BUT also tensions in the inside as they have different interests e.g. Brazil leading agricultural exporter = liberalisation in agricultural trade <-> India and China

    
    

controversial points

• market access for agricultural goods

  • G33 tried to influence the degree of openess for DC and exceptions for “special products” that shouldn’t be affected by lowering tariffs

• importance of new issues like investment and government procurement

  • India managed to mobilise a devloping country opposition to expanding rules on those

• relevance of development issues in light of growing influence of the global south

  
  

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  • failure led to a standstill in the expansion of global trade

  • by being able to shape the outcomes of WTO, BIC bet the liberal economic under US hegemony in its hearts

  • Since then WTO focuses on producing more small-sclae agreements