CH 2: The World Trade Organization Flashcards
(45 cards)
What does GATT stand for?
General Agreement on Tariffs and Trade
when was GATT formed?
1947
What was the basis for the international trading system until WTO?
GATT
What does WTO stand for?
World Trade Organization
When was WTO formed?
1995
What were the two roles anticipated for GATT at its creation?
- to develop a code of rules governing trade relations among participating countries.
- to provide a forum where countries could discuss trade disputes and address trade related issues.
What are “rounds” in relation to WTO and GATT?
major negotiating sessions
How long did the Urguay Round last?
from 1987 - 1993
How many countries signed to create the WTO?
100
What is the objective of the WTO as outlined in the preamble?
raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the worlds resources in accordance with the objective of sustainable development.
What do WTO members agree to? (Action and code wise)
to enter into reciprocal and mutually advantageous arrangements directed to the substantial
What circumstances led to the creation of GATT?
1930s protectionist trade policies in most nations.
The great depression
To boost domestic economies, some nations: imposed imported tariffs, imposed import quotas and implemented exchange controls.
This developed trading blocs
WW2, stimulated economies globally.
What is GATT?
A collection of trade agreements.
How many countries signed GATT?
23
What did GATT promote?
open markets
competition protected by agreed-upon rules.
What did GATT’s rule dictate?
rules for member countries to expand trade by making voluntary trade concessions that are:
transparent
multilateral &
discouraging trade discrimination against other trading partners (that are members)
What was GATT primary goal after WW2?
Reducing tariffs
What are the three fundamental rules of GATT?
Binding concessions rule
Most-favoured nations
national treatment rule
What is the most favoured nation rule?
a tariff negotiated between any two GATT countries should be available to all other member countries
What is the binding concession rule?
Once a country lowers a tariff it becomes bound and the country is obligated not to increase the tariff above the negotiated bound level.
What are the two exceptions of the Most Favoured Nation Rule?
Generalised system of preference (GSP), and the acceptance of free trade areas and customs unions.
What is the Generalised system of preference? (GSP)
The system that provides that GATT members may give preferential treatment to exports from developing countries
What is the national treatment rule?
The rule that once goods and services or investemnt are imported into a member country they must be treated the same way as domestic goods, services and investment; thus internal taxes and health and safety standards must be uniform for foreign and domestic concerns.
How does a WTO tribunal look at a product to determine the national treatment rule?
physical characteristics
end uses
perceptions by consumers, including cross-substitutability
tariff classification
