What is multilateral trade agreement?
Answer:Multilateral trade agreements
Trade agreement is an agreement, usually between or among governments, that encourages, regulates, and/or restricts elements of trade among the respective countries.
Definition: Multilateral trade agreements are between many nations at one time. For this reason, they are very complicated to negotiate, but are very powerful once all parties sign the agreement. The primary benefit of multilateral agreements is that all nations get treated equally, and so it levels the playing field, especially for poorer nations that are less competitive by nature.
Examples: TheDoharound of trade agreements is a multilateral trade agreement between all 149 members of t Elements of a Bilateral Business Agreement
Distinguish between bilateral and multilateral trade agreement.
Answer: Multilateral Vs. Bilateral Agreement
In international relations, states often enter into agreements with each other in order to improve relationships and prevent conflicts. Multilateral and bilateral agreements are examples of these kinds of relationships.
- A bilateral agreement is made between two and only two states. The agreement can be political, military or economic. The major reason states might pursue bilateral agreements is because it is easier to negotiate with just one country rather than with several.
- Multilateral agreements include more than two countries. States get involved in multilateral agreements because the responsibilities and risks are distributed among the group and thus the situation is more advantageous for individual states.
- Economic agreements often take a bilateral form because they only have to take into account the specific economic characteristics of two states. Sometimes states make agreements to trade specific goods and sometimes they make agreements saying that they will not trade specific goods if they have protectionist concerns.
- Military agreements are usually multilateral, with several countries providing troops for specific operations. NATO and the forces of the African Union are prime examples.
- Sometimes organizations produce agreements about how people ought to be treated. The more countries sign on, the more credible the agreement. An example would be the UN’s Universal Declaration of Human Rights in 1948.
ü Result of different ground of GATT and WTO.
Answer: GATT held a total of 8 rounds.
|GATT and WTO trade rounds
|Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade
|Countries exchanged some 5,000 tariff concessions
|Countries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25%
|Tariffs, admission ofJapan
|$2.5 billion in tariff reductions
|Tariff concessions worth $4.9 billion of world trade
|Tariff concessions worth $40 billion of world trade
|Tariffs, non-tariff measures, “framework” agreements
|Tariff reductions worth more than $300 billion dollars achieved
|Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc
|The round led to the creation of WTO, and extended the range of trade negotiations, leading to major reductions in tariffs (about 40%) and agricultural subsidies, an agreement to allow full access for textiles and clothing from developing countries, and an extension of intellectual property rights.
|Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency, patents etc
|The round is not yet concluded.
ü AnnecyRound – 1949
ü Torquay Round – 1951
The third round occurred in Torquay, England in 1950. 38 countries took part in the round. 8,700 tariff concessions were made totaling the remaining amount of tariffs to three-fourths of the tariffs which were in effect in 1948. The contemporaneous rejection by the United States of the Havana Charter signified the establishment of the GATT as a governing world body.
ü GenevaRound – 1955-1956
The fourth round returned to Geneva in 1955 and lasted until May 1956. 26 countries took part in the round. $2.5 billion in tariffs were eliminated or reduced.
ü Dillon Round – 1960-1962
The fifth round occurred once more in Geneva and lasted from 1960 to 1962. The talks were named after U.S. Treasury Secretary and former Under Secretary of State, Douglas Dillon, who first proposed the talks. 26 countries took part in the round. Along with reducing over $4.9 billion in tariffs, it also yielded discussion relating to the creation of the European Economic Community (EEC).
ü Kennedy Round – 1964-1967
Kennedy Round took place from 1964 to 1967.
ü TokyoRound – 1973-1979
Reduced tariffs and established new regulations aimed at controlling the proliferation of non-tariff barriers and voluntary export restrictions. 102 countries took part in the round. Concessions were made on $190 billion worth.
ü UruguayRound – 1986-1993
The Uruguay Round began in 1986. It was the most ambitious round to date, hoping to expand the competence of the GATT to important new areas such as services, capital, intellectual property, textiles, and agriculture. 123 countries took part in the round.
Agriculture was essentially exempted from previous agreements as it was given special status in the areas of import quotas and export subsidies, with only mild caveats. However, by the time of the Uruguayround, many countries considered the exception of agriculture to be sufficiently glaring that they refused to sign a new deal without some movement on agricultural products. These fourteen countries came to be known as the “Cairns Group“, and included mostly small and medium sized agricultural exporters such as Australia, Brazil, Canada, Indonesia, and New Zealand.
Describe the function of GATT.
Answer: Functioning of the GATT system
In the Negotiating Group on the Functioning of the GATT System FOGs), participants are tinkering with the mechanics of the GATT itself. Negotiators are exploring ways to clarify the proper role for the GATT in an increasingly complicated world economy.
At first glance, achievements of the Negotiating Group are modest. A “Trade Policy Review Mechanism” (TPRM) is up-and-running, with countries as diverse asMoroccoand theUnited Statescoming before their peers to undergo interrogation on trends in their economies, and the impact of their trade policies. Also, trade ministers have agreed to meet at least every two years to evaluate whether the world trading system remains on a steady course of economic growth.
Some countries have proposed a more ambitious undertaking: discussions on transforming the GATT into a World Trade Organization (WTO). Because the GATT was only meant to serve as an interim agreement when it was negotiated in 1947, it was given no organizational form or function. But, when the charter of the International Trade Organization, which was to replace the GATT, was not ratified by the U.S. Senate, the GATT assumed responsibility for the postwar world trading system. In this sense, the GATT is a sibling of the Bretton Woods institutions, the International Monetary Fund (IMF), and the World Bank, but lacks their international standing and legal character. Discussions of a WTO have been tentative; its main proponents in the Negotiating Group merely seek a ministerial declaration outlining a framework to guide post-Uruguay Round negotiations on such an institution.
Another undertaking of the Negotiating Group would increase the contribution of the GATT to greater coherence in global economic policy-making through strengthening its relationship with the IMF and World Bank. Proposals on this break down into two kinds: those focusing on coherence, a nebulous term that no country seems able to define, and those on the functional ties among the institutions. Without exception, the latter are the more realistic and attainable.
Proposals on coherence include a suggestion that the world’s trade and finance ministers make a joint declaration on the principles of coherence, defining in broad terms how trade, financial, and monetary policies interact. TheUnited States, as well as the representatives of the IMF and World Bank, see significant practical problems associated with a joint declaration and are not certain what purpose such a declaration would serve.
Proposals on functional ties range from formalized staff, management, and political linkages to an emphasis on continuing and enhancing existing informal exchanges between the GATT, the IMF, and the World Bank. One proposal suggests that, by strengthening the analytical capabilities of the GATT secretariat and devoting the resources necessary to achieving this, the GATT can begin to work on a par with the secretariats of the IMF and the World Bank.
Finally, a proposal has been put on the table that would establish an obligation on all Uruguay Round participants to fully implement into domestic law the results of the agreements they sign. The proposal appears to require a one-to-one correspondence between language in the agreements and language in domestic implementing legislation. It would also commit signatories to forswear unilateral interpretations of these agreements.
It is obvious that negotiators on FOGs still have much to digest before the conclusion of the Uruguay Round in December if their goal of strengthening the GATT is to be realized.
Describe the objective of WTO.
Answer: Simply put: the World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level. But there is more to it than that.Is it a bird, is it a plane?
There are a number of ways of looking at the WTO. It’s an organization for liberalizing trade. It’s a forum for governments to negotiate trade agreements. It’s a place for them to settle trade disputes. It operates a system of trade rules. (But it’s notSuperman, just in case anyone thought it could solve — or cause — all the world’sproblems!)Above all, it’s a negotiating forum … Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with each other. The first step is to talk. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO’s current work comes from the
1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
The WTO has six key objectives:
(1) to set and enforce rules for international trade, (2)
(2) to provide a forum for negotiating and monitoring further trade liberalization,
(3) to resolve trade disputes,
(4) to increase the transparency of decision-making processes,
(5) to cooperate with other major international economic institutions involved in global economic management, and
(6) to help developing countries benefit fully from the global trading system. Although shared by the GATT, in practice these goals have been pursued more comprehensively by the WTO. For example, whereas the GATT focused almost exclusively on goods—though much of agriculture … (100 of 2129 words)
The World Trade Organization (WTO) is an international organization that helps nations trade their goods and services with one another. There are currently about 150 member countries in the WTO.An international organization designed to supervise and liberalize world trade, the World Trade Organization (WTO) is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947. The GATT was founded in the expectation that it would soon be replaced by a specialized agency of the United Nations to be called the International Trade Organization (ITO). The ITO never materialized, however, and GATT proved remarkably successful in liberalizing the world’s trade over the next five decades. By the mid-1990s, however, there were calls for a stronger multilateral organization to monitor that trade and resolve disputes.