The most ambitious round of world trade negotiations, however, was the recent “Uruguay Round”. Initiated in Punta del Este, Uruguay, in 1986, this round of negotiations went through repeated roller-coaster rides at points, looking almost certainly like it would fail but was finally concluded, nearly eight years later, in December 1993. On April 15, 1994, the signatory governments.met in Marrakesh, Morocco, and formally ratified the agreement. The Uruguay Round was considered ambitious in as much as it sought to address numerous issues that GATT has previously sidestepped since its creation in 1948. These issues included:
- Trade in services.
- A consistent set of rules governing trade in intellectual property rights (“TRIPs”).
- A consistent set of rules to govern trade-related investment measures (“TRIMs”), or direct investments abroad.
- Trade in textiles, which had previously been protected (under the auspices of GATT) through the “multi-fiber agreement” .
- Trade in agricultural products.
- The creations of a new entity where by GATT would be renamed the “World Trade Organization (WTO)” with improved dispute settlement processes, and improved “functioning of the GATT system” (FOGS).
At the conclusion of the Uruguay Round in December 1993, many of these issues were successfully addressed.
The specific achievements of the Uruguay Round agreements may be listed as follows:
- Agreements on services trade were reached in the areas of banking, insurance, and tourism however, agreement in areas such as shipping, telecommunications, airlines, and audio-visual products ,were postponed.
- The new rules tighten anti-dumping laws and follow US practices in this regard (Section 731, which we discussed above) rather closely.
- The protection of intellectual property rights has been made uniform and substantially strengthened, in the areas of patents, copyrights, trademarks, industrial designs, trade secrets, and integrated circuits.
- The TRIMs text establishes GATT oversight in investment matters, and prohibits imposition of local content rules and trade-balancing rules.
- Industrialized countries agreed to a 10-year phaseout of the multi-fiber agreement, which was originally intended to protect the textile industries of the US, Japan and Western European countries from low-wage textile exporters, primarily in Asia.
- Existing tariffs on both industrial and agricultural products will be cut by an average of 40%, most of them over 5 years starting 1995, in some industries, (for example, construction equipment, medical equipment, beer, steel, pharmaceuticals), tariffs are completely eliminated among major trading partners in the industrialized world, in electronics, tariff cuts range from 50% to 100% worldwide.
- Subsidies are more clearly defined and categorized, and these definitions and categories largely follow those used in relation to US countervailing duty laws.
- The agreement establishes international rules between governments regarding product and technical standards and in matters such as testing, inspection, and certification.
- Most of the existing voluntary export restraints will be eliminated (although each country is allowed to “grandfather” one such agreement until 1999).
- A framework for the successor to GATT, the WTO, has been put in place.
It is estimated that the successful implementation of the Uruguay Round agreements will result in approximately a 3.5% growth in gross world product during the next ten years, this translates to roughly an additional $235 billion in global income each year.