(GATT/WTO) The eighth round of multilateral trade negotiations concerning the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). The Uruguay Round (so named because meetings began in Punta del Este, Uruguay in 1987) concluded in December, 1993 after seven years of talks with 117 member nations. The major goals of the Uruguay Round were to reduce barriers to trade in goods; to strengthen the role of GATT and improve the multilateral trading system; to increase the responsiveness of GATT to the evolving international economic environment; to encourage cooperation in strengthening the inter-relationship between trade and other economic policies affecting growth and development; and the establishment of a multilateral framework of principles and rules for trade in services, including the elaboration of possible disciplines for individual service sectors.
Key provisions of the Uruguay Round agreements were: a reduction of import tariffs, with an overall cut of more than 33 percent of global tariffs; a gradual reduction of 36 percent of government subsidies for farmers; a phasing-out of import protection for textile producers in industrialized countries allowing more open markets for entry of cheaper products from Third World countries; stricter anti-dumping rules; greater global protection of intellectual property rights, including patents and copyrighted goods such as films and music. Although agriculture and other industries were brought under GATT for the first time, certain industries (such as the entertainment industry) were, in the end, excluded from the Round negotiations in order for negotiators to reach a final agreement. Particularly disappointing to many was the lack of progress in opening access to the trade of financial services, such as banking, accounting, and insurance. Most aspects of the agreement went into effect July 1, 1995.
Agreements reached at the Uruguay Round covered:
(1) Market Access for Goods–Tariffs to be reduced by an average of one-third, with the U.S. and other major industrial nations eliminating tariffs altogether on some products, by one-half on others, while cutting tariffs much less in the rest of the world.
(2) Agriculture–Strengthened long-term rules for agricultural trade and assures reduction of specific policies that distort agricultural trade. Addressed export subsidies, domestic subsidies, and market access. Agricultural export subsidies and some farm subsidies made subject to multilateral disciplines, and to be bound and reduced. Many non-tariff measures, including quotas to be converted to low tariffs over time.
(3) Textiles and Clothing–The Multi-Fiber Arrangement (MFA), a system of quotas that limits imports of textiles and apparel to the U.S. and other developed countries, to be phased out over a 10 year period. The quotas will eventually be replaced by tariffs.
(4) Safeguards–Provided incentives for countries to use GATT safeguard rules when import-related, serious injury problems occur.
(5) Antidumping–Revised the 1979 Antidumping Code, by improving provisions to define, deter, and discourage the use of dumping practices. Disputes between GATT members to be settled by binding dispute settlement.
(6) Subsidies and Countervailing Measures–Established clearer rules and stronger disciplines in the subsidies area while also making certain subsidies non-actionable.
(7) Trade-related Investment Measures (TRIMs)–Limited the ability of countries to favor domestically owned factories at the expense of foreign-owned ones. Prohibits local content and trade balancing requirements. Established a 5 to 7-year transition period for developing and least-developed countries.
(8) Import Licensing Procedures–More precisely defined automatic and non-automatic licensing. Signatories that adopt new procedures to notify the Import Licensing Committee within 60 days and provide information about it.
(9) Customs Valuation–Amendments to the Customs Valuation Code to help stem fraud, retain established minimum values, and encourage developing countries to study areas of concern in customs valuation.
(10) Preshipment Inspection–Regulated activities of Preshipment Inspection companies and reduced impediments to international trade resulting from the use of such companies, particularly in developing countries where they may supplement or replace national customs services.
(11) Rules of Origin–A program to be implemented to harmonize rules for determination of the origin of goods. Established a GATT Committee on Rules of Origin and a Customs Cooperation Council Technical Committee on Rules of Origin.
(12) Technical Barriers to Trade–Updated and improved rules respecting standards, technical regulations and conformity assessment procedures.
(13) Sanitary and Phytosanitary Measures–Established rules for the development of measures which are taken to protect human, animal or plant life or health in food safety or agriculture. Included quarantine procedures, food processing measures, meat inspection rules, procedures for approval of food additives or use of pesticides.
(14) Services–The General Agreement on Trade in Services (GATS) was the first multilateral, legally enforceable agreement covering trade investment in the service sectors. Principal elements included most-favored-nation treatment, national treatment, market access, transparency, and the free flow of payments and transfers.
(15) Trade-Related Intellectual Property Rights (TRIPs)–Established improved standards for the protection of a full range of property rights and the enforcement of those standards both internally and at the border. Covered: copyrights, patents, trademarks, industrial designs, trade secrets, integrated circuits, and geographical indications. Provided for a 20-year term of protection for most of these rights.
(16) Dispute Settlement–The Dispute Settlement Understanding (DSU) created new procedures for settlement of disputes arising under any of the Uruguay Round agreements.
(17) World Trade Organization (WTO)–Established a new organization available only to countries that were contracting parties to the GATT and that agreed and adhered to all of the Uruguay Round agreements. Encompassed and extended the then current GATT structure. The intention was for the new WTO to have a stature similar to that of the Bretton Woods financial institutions, the World Bank, and the International Monetary Fund.
(18) GATT Articles–Updated articles relating to balance-of-payment reform, state trading enterprises, regional trading arrangements, and waivers of obligation.
(19) Trade Policy Review Mechanism–Provided for regular examination of national trade policies and other economic policies bearing on international trading.
(20) Ministerial Decisions and Declaration–Stated the views and objectives of the Uruguay Round participants on a number of issues relating to the operation of the global trading system.
(21) Government Procurement–A new Agreement on Government Procurement replaced the existing agreement. Included procurement of services and construction and some coverage of subcentral governments and government-owned utilities.
See General Agreement on Tariffs and Trade; rounds; Tokyo Round, World Trade Organization.