WTO news: what’s been happening in the WTO

WTO NEWS: 1998 PRESS RELEASES

PRESS/88
5 February 1998

Golden jubilee of the multilateral trading system

This year, 1998, marks the fiftieth anniversary of the operation of the multilateral trading system, formerly known as the GATT which was later superseded by the World Trade Organization (WTO). Below is a short statement from Renato Ruggiero, Director-General of the WTO, regarding this anniversary:

“This year is the Golden Jubilee of the multilateral trading system. The creation of this system surely ranks among the greatest economic achievements of the post-World War II era. For a war-torn international community, the system gave substance to a shared dream of a fair and open world trading system. More than that, it has led directly to the breaking-down of barriers not just between countries but between peoples. At the heart of the system are its rules-based structure and the principle of non-discrimination.

“The multilateral trading system continues to grow in scope and credibility. Currently, there are 132 member governments, with an additional 30 negotiating their terms of membership. It would be difficult to overstate the contribution the WTO makes to growth and development on a world scale.

“On 20 May 1998, we will hold a high profile celebration in Geneva to mark the Golden Jubilee and highlight for the citizens of the world the contribution this system has made to global peace and prosperity."

Note to Editors:

Attached is a brief chronology of some of the more significant events and achievements in the life of the multilateral trading system so far.

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GATT/WTO chronology

1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and Trade (GATT) was signed by 23 nations - twelve developed and eleven developing economies - at the Palais des Nations in Geneva. The Agreement contained tariff concessions agreed to during the first multilateral trade negotiations and a set of rules designed to prevent these concessions from being frustrated by restrictive trade measures.

The genesis of GATT. In 1946, the newly-created Economic and Social Council of the United Nations called a conference to consider the creation of the International Trade Organization (ITO) which was envisaged as the final leg of a triad of post-War economic agencies (the other two were the International Monetary Fund and the International Bank for Reconstruction and Development -later the World Bank). A preparatory committee was established to draft the ITO charter.

During 1946-1947, the committee worked on the draft charter. However, independent of this official task under the UN mandate, the committee members conducted tariff-cutting negotiations among themselves in advance of the ITO. These negotiations resulted in about 45,000 tariff concessions affecting some US$ 10 billion of world trade.

The committee members also agreed to protect the value of the tariff concessions by early acceptance of some of the trade rules of the draft ITO charter. Thus, tariff concessions and trade rules together became known as the General Agreement on Tariffs and Trade (GATT) which was signed on 30 October 1947 by 23 countries as an interim measure.

In November 1947, delegations from 56 countries met in Havana, Cuba, to consider the ITO draft as a whole. After long and difficult negotiations, some 53 countries signed the Final Act authenticating the text of the Havana Charter in March 1948. There was no commitment, however, from governments to ratification and, in the end, the ITO was stillborn, leaving GATT as the only international instrument governing the conduct of world trade.

1948 Entry into force. On 1 January 1948, GATT entered into force. The 23 founding members were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States.

The first real business of the GATT was conducted by the First Session of Contracting Parties which began on 28 February 1948 and ended on 20 March 1948 in Havana, Cuba. The secretariat of the Interim Commission for the ITO, which served as the ad hoc secretariat of GATT, moved from Lake Placid, New York, to Geneva in 1948.

1949 Second Round at Annecy. During the second Round of trade negotiations, held from April to August at Annecy, France, the contracting parties exchanged some 5,000 tariff concessions. At their third Session, they also dealt with the accession of ten more countries.

1950 Third Round at Torquay. From September 1950 to April 1951, the contracting parties exchanged some 8,700 tariff concessions in the English town, yielding tariff reductions of about 25 per cent in relation to the 1948 level. Four more countries acceded to GATT. During the fifth Session of the Contracting Parties, the United States indicated that the ITO Charter would not be re-submitted to the US Congress; this, in effect, meant that ITO would not come into operation.

1956 Fourth Round at Geneva. The fourth Round was completed in May and produced some $2.5 billion worth of tariff reductions. At the beginning of the year, the GATT commercial policy course for officials of developing countries was inaugurated.

1960 The Dillon Round. The fifth Round opened in September and was divided into two phases: the first was concerned with negotiations with EEC member states for the creation of a single schedule of concessions for the Community based on its Common External Tariff; and the second was a further general round of tariff negotiations. Named in honour of US Under- Secretary of State Douglas Dillon who proposed the negotiations, the Round was concluded in July 1962 and resulted in about 4,400 tariff concessions covering $4.9 billion of trade.

1961 The Short-Term Arrangement covering cotton textiles was agreed as an exception to the GATT rules. The arrangement permitted the negotiation of quota restrictions affecting the exports of cotton-producing countries. In 1962 the "Short-term" Arrangement became the "Long-term" Arrangement, lasting until 1974 when the Multifibre Arrangement entered into force.

1964 The Kennedy Round. Meeting at Ministerial level, a Trade Negotiations Committee formally opened the Kennedy Round in May. In June 1967, the Round's Final Act was signed by some 50 participating countries which together accounted for 75 per cent of world trade. For the first time, negotiations departed from the product-by-product approach used in the previous Rounds to an across-the-board or linear method of cutting tariffs for industrial goods. The working hypothesis of a 50 per cent target cut in tariff levels was achieved in many areas. Concessions covered an estimated total value of trade of about $40 billion. Separate agreements were reached on grains, chemical products and a Code on Anti-Dumping.

1965 A New Chapter. The early 1960s marked the accession to the General Agreement of many newly-independent developing countries. In February, the Contracting Parties, meeting in a special session, adopted the text of Part IV on Trade and Development. The additional chapter to the GATT required developed countries to accord high priority to the reduction of trade barriers to products of developing countries. A Committee on Trade and Development was established to oversee the functioning of the new GATT provisions. In the preceding year, GATT had established the International Trade Centre (ITC) to help developing countries in trade promotion and identification of potential markets. Since 1968, the ITC has been jointly operated by GATT (later the WTO) and the UN Conference on Trade and Development (UNCTAD).

1973 The Tokyo Round. The seventh Round was launched by Ministers in September at the Japanese capital. Some 99 countries participated in negotiating a comprehensive body of agreements covering both tariff and non-tariff matters. At the end of the Round in November 1979, participants exchanged tariff reductions and bindings which covered more than $300 billion of trade. As a result of these cuts, the weighted average tariff on manufactured goods in the world's nine major industrial markets declined from 7.0 to 4.7 per cent. Agreements were reached in the following areas: subsidies and countervailing measures, technical barriers to trade, import licensing procedures, government procurement, customs valuation, a revised anti-dumping code, trade in bovine meat, trade in dairy products and trade in civil aircraft. The first concrete result of the Round was the reduction of import duties and other trade barriers by industrial countries on tropical products exported by developing countries.

1974 On 1 January 1974, the Arrangement Regarding International Trade in Textiles, otherwise known as the Multifibre Arrangement (MFA), entered into force. It superseded the arrangements that had been governing trade in cotton textiles since 1961. The MFA sought to promote the expansion and progressive liberalization of trade in textile products while at the same time avoiding disruptive effects in individual markets and lines of production. The MFA was extended in 1978, 1982, 1986, 1991 and 1992.

1986 The Uruguay Round. GATT Trade Ministers meeting at Punta del Este, Uruguay, launched the eighth Round of trade negotiations on 20 September. Envisaged to last four years, negotiations were held in Geneva, Switzerland, and continued for some seven and a half years covering the most wide-ranging and ambitious agenda of any Round so far.

1993 Successful Conclusion of the Uruguay Round negotiations on 15 December 1993 in Geneva, Switzerland.

1994 The Final Act of the Uruguay Round signed by Ministers on 15 April 1994 in Marrakesh, Morocco. Results included average tariff cuts of 40% on industrial products; an average increase in the percentage of tariff bindings from 21% to 73% (for developing countries), from 78% to 99% (for developed countries), and from 73% to 98% (for transition economies); a comprehensive programme of agricultural reform, including liberalization commitments on tariffs, domestic support and export subsidies, and the replacement of all quantitative restrictions and other non-tariff measures by tariffs; a phase-out of export restrictions and enhanced market access for textiles and clothing; strengthened agreements on safeguards, technical barriers, customs valuation, import licensing, state-trading, subsidies, and anti-dumping and countervailing. The results also produced new agreements on such areas as trade in services, intellectual property rights, sanitary and phytosanitary measures, and trade-related investment measures. The Uruguay Round results also transformed the provisional multilateral trading system which had existed under the GATT into the permanent World Trade Organization with a significantly strengthened legal mechanism for resolving trade disputes multilaterally.

1995 Entry into force of the World Trade Organization on 1 January 1995.

On 31 May 1995, WTO General Council approved the Headquarters Agreement with the Swiss Confederation, including the decision to locate the WTO in Geneva.

Financial services accord reached on 28 July 1995, with governments agreeing to negotiate further liberalization at the end of 1997.

1996 Basic telecommunications negotiations are suspended in May 1996 in spite of substantial offers. Governments participating agreed to preserve the offer and to re-examine them during a 30-day period beginning 15 January 1997.

1996 Maritime transport services negotiations suspended in July 1996. Members participating in the negotiations agreed to suspend the negotiations and to resume them, on the basis of existing or improved offers, at the time of the further round of comprehensive negotiations on trade in services mandated to begin in the year 2000.

First WTO Ministerial Conference held in Singapore, 9-13 December 1996. Among the major conclusions of the Conference was the establishment of three working groups, respectively, on trade and investment, trade and competition policy, and transparency in government procurement, plus a mandate to conduct a study on trade facilitation.

1997 Successful conclusion of negotiations on basic telecommunications services on 15 February 1997. Sixty-nine governments agreed to wide-ranging liberalization measures. Domestic and international revenue generated in the basic telecommunications sector roughly amounts to US$600 billion annually. The agreement entered into force on 5 February 1998.

1997 On 26 March 1997, forty governments agreed to cut customs duties on information technology products, beginning on 1 July 1997 and with the aim of eliminating all duties on these products by 2000. International trade in these products amounts to some US$600 billion annually.

1997 Successful conclusion of negotiations on financial services on 12 December 1997. Seventy governments reached a multilateral agreement to open their financial services sectors, covering more than 95 per cent of trade in banking, insurance, securities and financial information. The agreement will enter into force on 1 March 1999.