Introduction: an overview of the international trading system
Multilateral negotiations under the GATT Over the course of its existence, the GATT (1947-1994) provided a global platform for rule-based trade regimes, settled scores of international trade disputes, and achieved a total of eight rounds of multilateral trade negotiations (see Table 1.1). The first GATT round established the GATT itself-it guaranteed MFN status to all contracting parties on a reciprocal basis and agreed on concessions to some 45,000 tariff lines worth $10 billion, one-fifth of global trade at that time. In all, the first five GATT rounds of trade negotiations between 1948 and 1963 succeeded in reducing weighted tariffs by 36 percent. The next three rounds-the Kennedy Round (1964-1967), the Tokyo Round (1973-1979), and the Uruguay Round (1986-1994) brought down tariffs further by another 37 percent, 33 percent, and 38 percent, respectively. The GATT rounds of trade negotiations also addressed non-tariff barriers (NTBs). The Kennedy Round, for example, hammered out agreements on customs valuation and anti-dumping issues, and the Tokyo Round further widened the GATT coverage on NTBs by reaching agreements on subsidies and countervailing measures, technical barriers to trade (TBT), import licensing procedures, anti-dumping laws, and government procurement. Another lasting contribution of the Tokyo Round was the ‘Enabling Clause,’ which allowed GATT contracting parties to grant favorable tariff and non-tariff treatments to the developing countries under what came to be known as the Special and Differential Treatment (SDT) measures. With each round of trade negotiations, up until the Uruguay Round, the GATT contributed to the further liberalization of the international trading system, but many countries still continued to use bilateral agreements to impose voluntary export restraints (VERs), quota restrictions (QRS), and other such trade-distorting measures.