The GATT and its Challenges at 60
26 Pages Posted: 26 Aug 2009
Date Written: August 26, 2009
The importance of the General Agreement on Tariffs and Trade (GATT), concluded in Geneva on 30 October 1947, applied on a provisional basis from January 1948 until December 1994 and reincarnated since the establishment of the WTO in 1995 in the GATT 1994, cannot be overstated. As it functioned as the major international ‘agreement’ and ‘institution’ at the heart of the multilateral trading system, the GATT accomplished much of its original mandate: the substantial reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international commerce.
Scholars have described the GATT 1994 as an ‘incomplete contract’ for at least three sets of reasons. First, the GATT 1994 directly binds only certain trade policies, leaving WTO Members significant discretion over domestic regulatory and fiscal policies with a potentially high trade impact. Second, the GATT 1994 employs vaguely worded provisions, leaving the determination of the actual meaning of the agreement subject to adjudication or to further treaty negotiations. Third, the GATT 1994 includes more or less explicitly an ambitious built-in agenda with regard to the liberalisation of Members’ trade policies, conditioning the success of this agenda to Members’ ability to reach a consensus in future negotiating rounds. In this sense, the GATT 1994 is no different from most other international treaties, which suffer from similar ‘birth defects’.
The present Chapter addresses a few selected key issues stemming out of the ‘incomplete’ character of the GATT 1994, and which remain controversial. The Chapter is structured in three parts, along the lines of Mavroidis’ subdivision of GATT 1994 disciplines: (i) disciplines on ‘trade instruments’ (measures affecting importation or exportation), (ii) disciplines on ‘domestic instruments’ (measures affecting production or consumption) and (iii) disciplines on ‘state contingencies’ (specific emergencies dealing, for example, with balance of payments, currency exchange and dumping). The Chapter advances that while the GATT has, so far, accomplished a lot in terms of establishing the key principles and approaches to the regulation of trade in goods, it has still further challenges to meet in its not-too-distant future.
Keywords: GATT, trade instruments, domestic instruments, state contingencies, Article XI, NAMA, national treatment, general exception, balance of payments, safeguards, conflict
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