World Customs Organization

Under the Article XXIV of the GATT, the member countries could organise themselves into free trade areas or customs unions. The strong regional trading block such as European Union (EU), North American Free Trade Association (NAFTA), Association of South East Asian Nations (ASEAN) and Asian Pacific Economic Co-operation (APEC) have emerged. They have undermined the basic GATT principles of non-discrimination and reciprocity and weakened the GATT. The diversities existing among them created difficult problems in framing and implementing uniform general rules of conduct concerning trade, tariffs and payments. Although GATT attempted to extend preferential or special treatment to the less developed countries, yet the escape clause and safeguard rules of the GATT amounted to the denial of trade benefits to them.

GATT and Its Objectives:

• The CONTRACTING PARTIES comprised all of the parties to GATT and thus investigations, recommendations and rulings were to be made collectively.
• Agriculture had remained generally excluded from the GATT jurisdiction in the earlier rounds.
• Provision shall be made for subsequent review of the implementation of the recommendations.

In April 1994 the Uruguay Round ended with 111 countries signing an agreement in Marrakesh, Morocco, to establish the World Trade Organization (WTO), an intergovernmental organization with a firmer legal foundation than its predecessor. Governing the WTO are a number of legal texts, most notably the GATT, the General Agreement on Trade in Services, and the agreement on Trade-Related Aspects of Intellectual Property Rights. Second, while the CONTRACTING PARTIES were to investigate complaints, make recommendations to a contracting party and make rulings, no process was provided on how this was to be done.

• The CONTRACTING PARTIES are to investigate the matter and can make recommendations to the parties or make a ruling.
• The GATT aimed to improve existing international relations by making trade easier.
• These fourteen countries came to be known as the “Cairns Group”, and included mostly small and medium-sized agricultural exporters such as Australia, Brazil, Canada, Indonesia, and New Zealand.
• These negotiating rounds were dominated by the biggest economies engaged in trade – the United States, European countries, and Japan.
• As part of the economic program for the Western Allies after World War II, trade barriers were reduced and discriminatory tariff preferences were eliminated wherever possible.
• That’s because, technically, the GATT was an agreement under the provisions of the U.S.

In the sphere of tariff reduction, the object was to bring about further relaxation of tariff barriers. In the Mid-Term Review of the negotiations, a target for an average reduction of tariff by about 30 percent was set. No doubt, the Kennedy Round of the GATT negotiations could make a significant contribution in effecting substantial tariff cuts, yet the achievement was still short of objective. However, there general agreement on tariffs and trade was greater awareness among the advanced countries about the trade needs of the LDC’s. The First GATT Conference or round of negotiations was held at Geneva in April 1947. This round of negotiations included 123 sets of bilateral negotiations and the results of this conference included- (i) complete elimination of certain duties and preferences, (ii) scaling down of duty preferences, (iii) the binding of duties at the existing levels; and (iv) the binding of duty free treatment.

If the matter has still not been resolved, the contracting party can refer it to the CONTRACTING PARTIES. The CONTRACTING PARTIES are to investigate the matter and can make recommendations to the parties or make a ruling. If the CONTRACTING PARTIES consider the matter sufficiently serious it can authorize a contracting party to suspend the application to another contracting party of concessions or other obligations under the Agreement. The sixth round of GATT multilateral trade negotiations took place between 1964 and 1967. President John F. Kennedy in recognition of his support for the reformulation of the United States trade agenda, which resulted in the Trade Expansion Act of 1962.

Article 24

The agreement also provided a system for arbitrating commercial disputes among nations. The framework enabled several multilateral negotiations to reduce tariff barriers. At the commencement of the Uruguay Round, it was recognised that about 50 percent of the world trade was affected by the non-tariff trade barriers. As these were applied discriminatively against the specific countries, there was the fear that they would defeat multilateralism and lead to bilateralism. It is true that the Tokyo Round extended the scope of GATT regulations to the non-tariff barriers. But the total outcome was designed to meet the interests of the United States, the EEC and other advanced nations.

and Formalities connected with Importation and Exportation*

In 1964, GATT began to work toward curbing predatory pricing policies (known as dumping). Then in the 1970s, an arrangement regarding international trade in textiles, known as the Multifibre Arrangement (MFA), came into force. The next big event was the Uruguay Round, which lasted from 1986 to 1993, with the agreements signed in 1994, and which created the WTO. The GATT had certainly ensured the scaling down of tariff structure but the quantitative trade restrictions remained for a long time outside the GATT ambit.

This is when GATT or General Agreement on Tariffs and Trade  came into the picture. GATT was formed when 23 countries joined hands and signed a legal agreement  to minimise trade barriers among countries by reducing tariffs, quotas, and subsidies. The latest round of negotiations among WTO members, known as the Doha Development Round, began in 2001 and is ongoing.

The sixth round was named for President John F. Kennedy and took place in Geneva from 1964 to 1967. The United States brought in a new strategy when it offered broad, across-the-board reductions. The Tokyo Round (1973–1979)continued tariff reduction, leading to a general overall rate of 4 percent on industrial commodities.

Article

The Tokyo Round resulted in an agreement concerning the simplification of import licensing procedures. It provided for automatic grant of approval of the application on the inflow of goods, simplification of licensing procedure in case of quota and other import restrictions. It also provided for creating institutions and procedures for consultation and settlement of disputes between the contracting parties.

h Anniversary of the GATT/WTO Valuation Agreement

The Sixth GATT Conference ( ), known as the Kennedy Round, was held at Geneva. The results of Kennedy Round included the tariff reduction by the advanced countries like the U.S.A, the EEC countries, Japan and Canada on an average to the extent of 35 percent. In brief, the GATT simultaneously acted as the legislator of the ‘rules of the game’; served as a forum for trade negotiations among the member countries and; acted as an international court to settle trade disputes among different member countries. A unanimous vote was required to effect amendment in entrenched Articles of the GATT.

Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994

Its supporters contend that it is crucial to achieving the benefits of free trade, such as lower prices for consumers and export opportunities for producers. Supporters also note that GATT rules against trade discrimination make it more difficult for governments to use trade preferences and sanctions as diplomatic tools. Some critics, particularly from developing countries, feel that the GATT has not gone far enough in liberalizing trade in agriculture and textiles.

Such reviews would be limited to the clarification of specific issues raised by a notification or examination of whether a consultation under paragraph 4(a) of Article XII or paragraph 12(a) of Article XVIII is required. Members which have reasons to believe that a restrictive import measure applied by another Member was taken for balance-of-payments purposes may bring the matter to the attention of the Committee. The Chairman of the Committee shall request information on the measure and make it available to all Members. Without prejudice to the right of any member of the Committee to seek appropriate clarifications in the course of consultations, questions may be submitted in advance for consideration by the consulting Member.

Consequently, the developed countries had used with impunity the quantitative trade restrictions such as import quotas, export subsidies, voluntary export restraints, health and safety regulation etc. During the period before the Kennedy Round, tariffs on aggregate imports of manufactured goods by developed countries averaged 11 percent. In addition, no initiative had been taken by them about the relaxation of trade barriers on agricultural and tropical products of the less developed countries. A large majority of the contracting parties of the GATT was in the category of the developing countries. Almost entire wrangling at the different rounds of GATT negotiations was meant for serving the trade and other interests of a few developed countries.

Rather than further drain Europe’s devastated economies, the United States injected much needed economic assistance in the form of the Marshall Plan, which was an attempt to help reconstruct Europe in order to neutralize the considerable political appeal of socialist and communist parties after the war. As part of the economic program for the Western Allies after World War II, trade barriers were reduced and discriminatory tariff preferences were eliminated wherever possible. The WTO Valuation Agreement is formally known as the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT) 1994. It replaced the GATT Valuation Code as a result of the Uruguay Round multilateral trade negotiations which created the WTO in 1994. In such circumstances, the contracting party may make written representations to the other contracting party with a view to achieving a satisfactory settlement of the matter.