Word: gattes
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Dates: during 1980-1989
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After World War II, members of the victorious Alliance recognized that open trade, which creates global interdependence, would reduce the likelihood of international conflict. The world's trading partners formed GATT so that they could meet at occasional conferences to make mutual commitments to tariff reductions. Nations agreed to lower their trade barriers and to accept increased imports in exchange for the opportunity to expand exports...
...GATT's power stems from the unanimous agreement of trade ministers, who have final authority to sign trade treaties for the nations they represent. Only twice before have all the GATT members met at the ministerial level to determine world-wide trade policy--the Kennedy Round of talks in the early 1960's and the Tokyo Round in 1973. At those meetings, the GATT procedure worked ideally, and trade partners rapidly agreed on remarkable reductions in tariff levels...
...specific issues, the ministers at the recent Geneva talks knew they would be hard-pressed to repeat the success of the earlier agreement. Differences about Third World nations' protection of trade in banking and insurance services and the European Common Market's expansive subsidies for agricultural products prevented the GATT participants from reaching any consensus on the specifics. Instead the GATT signators united only on the need to deter the increasingly tempting use of protectionist measures for solving national economic woes. Consequently, they grudgingly committed their countries to "refrain from taking or maintaining" import curbs...
This sentiment is perhaps no more beneficial to global trade then a failure to reach an agreement at all. The Kennedy and Tokyo Rounds succeeded because they outlined specific reductions of tariffs on goods and set percentage guidelines for overall trade barrier reductions. Only through such concrete requirements can GATT, which has no mechanism to enforce trade pacts, insure that individual nations support free trade...
Maybe the only difference between the new pact and no pact at all is that the GATT accord preserves an illusion of a commitment to free trade. Had the talks failed to reach any agreement, the world's nations would have been forced to realize how much more needs to be done to better trade relations and to prevent protectionism. Now governments can impose tariffs and other restrictions and still remain loyal to the letter of the Geneva package. At the outset of the talks, U.S. Deputy Treasury Secretary R.T. McNamar declared. "The GATT ministerial decision may well...