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Gatt After Six Years: An Appraisal

Published online by Cambridge University Press:  22 May 2009

Wytze Gorter
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Extract

As this is being written, representatives of the thirty-three nations that are signatories to the General Agreement on Tariffs and Trade (GATT) have just met again in Geneva. Their deliberations, though usually given minor notice in the press, are important. About four-fifths of the world's international trade is carried on by the countries participating in GATT.

Type
Research Article
Information
International Organization , Volume 8 , Issue 1 , February 1954 , pp. 1 - 18
Copyright
Copyright © The IO Foundation 1954

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References

1 GATT will also be referred to as the “Agreement“.

2 For an interesting, informative account of the demise of the ITO, see Diebold, William, Jr. “The End of I.T.O.”, Essays in International Finance (Princeton: International Finance Section. Department of Economics and Social Institutions, October 1952), No. 16.

3 This is not to suggest that (he United States purchased support for its favorite proposals,) although the terms of the Anglo-American loan i n 1946 committed the United Kingdom to reaffirm its support of the multilateraSsm already agreed to in the Atlantic Charter. Nonetheless, GATT negotiators were undoubtedly conscious of the risks entailed by failure to agree with the United States on certain points. Critics of the Agreement, however, argue that the United States did not sufficiently exploit the bargaining leverage provided by the economic assistance programs. The vehemence of both sides in this controversy is evidence of the compromise nature of GATT.

4 These levels were “… measured in weighted average ad valorem equivalents, with specific duties converted to ad valorem figures at 1951 prices, and with all duties weighted by the volume of imports in 1949”. See Wilcox, , Clair, , “Trade Policy for the Fifties”, American Economic Review, Papers and Proceedings, Vol. XLIII, No. 2 (05, 1953), p. 62Google Scholar.

5 Hansard, , House of Lords, 04 2,1952, as quoted in International Trade News Bulletin (Geneva: Contracting Parties to the GATT, April, 1952), Vol. II, No. 4, p. 158–159Google Scholar.

6 Loc. cit.

7 Department of State, Expanding World Trade: United States Policy and Program (Washington: 01, 1951), Commercial Policy Series 133, Department of State Publication 4032, p. 1Google Scholar.

8 “Contracting party” refers to a country that is a signatory to GATT.

9 See below, p. 10.

10 For example, Sir Arthur Salter, Minister of State for Economic Affairs, noted that “We are fully sensible of the disadvantages of some provisions of this treaty [GATT], including the provision as to ‘no new preferences’.” (Hansard, February 22, 1952, as quoted in International Trade News Bulletin, Vol. II, No. 2 (02, 1952), p. 55–56.)Google Scholar For a recent development in this matter see below, note 25.

11 The inadequacy of financial reserves has forced many countries to rely heavily upon direct quantitative controls upon imports and exports. So long as theycontinue to rely upon these controls true multilateralism will not be achieved.

12 On the relationship between national economic planning and international trade, see the gloomy predictions of Robbins, Lionel, Economic Planning and Order (London: Macmillan, 1938), Ch. IIIGoogle Scholar.

13 “The End of I.T.O.”. op. cit., p. 30.

14 It should be noted that this position on GATT differs from Diebold's. He believes that so long as GATT signatories continue to “frustrate” attempts to include provisions for dealing with problems of economic development, measures to insure a high level of income and employment, and related matters “GATT's strength is in doubt…” This writer believes quite the opposite. So long as the frustration continues, the strength of GATT is undiminished and perhaps increased.

15 Viner, , Jacob, Rearmament and International Commercial Policies (Washington: Department of State, Foreign Service Institute, 1951), p. 22–23Google Scholar.

16 See below, p. 9. As inducement to join GATT, considerable leeway has been given to nations whose laws conflict with some of the specific trade practice provisions of Part III of the Agreement. Under the terms of the An-necy Protocol, a government acceding to GATT agrees to apply provisionally Parts I (primarily stipulating mostfavored-nation treatment) and III (primarily dealing with administrative procedures), and Part II “… to the fullest extent not inconsistent with its legislation existing on the date of the Protocol”. (Interim Commission for the International Trade Organization, General Agreement on Tariffs and Trade, The Annecy Protocol of Terms of Accession and the Annecy Schedules of Tariff Concessions [Geneva: 1949], p. 2.)Google Scholar

The Torquay Protocol was even more liberal. It provided that acceding nations could continue discriminatory internal taxes against imports (non-national treatment) even though Article I, Part I of GATT called for their elimination. It also made possible the retention of countervailing duties in excess of those stipulated in Article VI. (The Contracting Parties to the General Agreement on Tariffs and Trade, General Agreement on Tariffs and Trade, The Torquay Protocol… and the Torquay Schedules of Tariff Concessions [Geneva: 05, 1951], p. 15.)Google Scholar

17 There is no need for an exhaustive analysis of the provisions of GATT. This has already been done. For an excellent study of GATT and ITO see Brown, , JrAdams, William, The United States and the Restoration of World Trade (Washington: The Brookings Institution, 1950), especially Chapters IX, X, and XIIIGoogle Scholar.

18 For a thorough examination of customs unions, see Viner, , Jacob, , The Customs Union Issue (New York: Carnegie Endowment for International Peace, 1950), especially Chapter IVGoogle Scholar. See also Haberler, Von, Gottfried, , The Theory of International Trade (New York: Mactnillan, 1937), p. 390–393Google Scholar.

19 This is evident from GATT's own publications. See, for example, The Contracting Parties to the General Agreement of Tariffs and Trade, The Use of Quantitative Import Restrictions to Safeguard Balances of Payments (Geneva: 11, 1951)Google Scholar; and The Use of Quantitative Restrictions for Protective and Other Commercial Purposes (Geneva: 07, 1950)Google Scholar.

20 Interim Commission for the International Trade Organziation at the request of the Contraeting Parties to the General Agreement on Tariffs and Trade, The Attack on Trade Batriers, A Progress Report on the Operation of the General Agreement on Tariffs and Trade from January, 1948 to August, 1949 (Geneva: 08, 1949), p. 11Google Scholar.

21 21 The Interi m Commission for the Intema -tional Trade Organization at the request of the General Agreement on Tariffs and Trade, GATT in Action, Third Report on the General Agreement on Tariffs and Trade (Geneva: 01, 1952), p. 8Google Scholar.

22 International Trade News Bulletin, Vol, III, No. 10 (10, 1953), p. 415Google Scholar.

23 Interim Commission for the International Trade Organization at the request of the Contracting Parties to the General Agreement on Tariffs and Trade, Liberating World Trade, Second Report on trie Operation of the General Agreement on Tariffs and Trade (Geneva: 06, 1950), p. 9Google Scholar.

24 GATT in Action, op. cit., p. 24.

25 This agreement was modified at the latest session of the signatories. The United Kingdom received approval of its proposal for permission to increase unbound duties on imports from foreign countries while continuing to permit their free entry from Commonwealth countries. This will increase the margin of preference. Yet the contracting partie s ruled that this will be “… consistent with the objectives of the General Agreement, to relieve them [the United Kingdom Government] of the need, under the rules of Article I regarding tariff preferences, to impose duties on duty-free goods [imported from the Commonwealth countries/. …” The United Kingdom will be permitted to increase the margin of preference only if the increase in duty on foreign imports will not “… cause substantial diversion of trade from foreign to Commonwealth suppliers ” and may not increase preferential margins in this manner if the imports from the Commonwealth countries are not already entering the United Kingdom duty-free. (International Trade News Bulletin, Vol. Ill, No. 10 [10, 1953], p. 408.)Google Scholar

26 For example, Cuba and the United States agreed to bind certain preferential rates on imports into the United States from Cuba. Subsequently, the United States negotiated rate reductions with other countries. Some of the concessions granted by the United States involved duty reductions on items also imported from Cuba at preferential rates. Cuba protested, but the protest was not allowed. In ruling on this matter, the Contracting Parties announced that the binding applied only to the absolute level of the preferential rates and not against reductions in the margin of preference, For a more detailed statement of this case, see United States Tariff Commission, Operation of the Trade Agreements Program, Third Report, 04, 1949–June, 1950, Report No. 172, Second Series(Washington: Government Printing Office, 1951), p. 33–34Google Scholar.

27 As noted earlier (see p. 9 above), the British governmentconsidered GATT prohibition against new preferences to be disadvantageous to the United Kingdom.

28 See GATT, Articles XII–XIV.

29 m The countries were Australia, Austria, Brazil, Ceylon, Chile, Denmark, Finland, France, Germany, Greece, India, Italy, the Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Sweden, Turkey, Union of South Africa, and United Kingdom. (Contracting Parties to the General Agreement on Tariffs and Trade, Third Report on the Discriminatory Application of Import Restrictions [Geneva: 1952], p. 5–6.)Google Scholar

During the 1953 session of the contracting parties, the Union of South Africa announced that after January 1, 1954 its import restrictions would be administered in a nondiscriminatory manner. The Netherlands stated that it was relaxing its restrictions on imports from the dollar area. (United States Department of State, Press Release, No. 598 [10 27, 1953].)Google Scholar

30 Ibid., p. 6.

31 They were Belgium, Canada, Cuba, Dominican Kepublic, Haiti, Luxembourg, Nicaragua, Peru, and the United States. Liberia and Burma made no report. (Loc. cit.) Liberia withdrew from GATT effective June 13, 1953.

32 Op. cit., p. 7.

33 The Times (London), 03 24, 1953Google Scholar; Press Notice, Board of Trade, 03 23, 1953Google Scholar, as cited in International Trade News Bulletin, Vol. Ill, No. 3 (03, 1953), p. 86–87Google Scholar.

34 International Trade News Bulletin, Vol. Ill, No. 1 (01, 1953), p. 19Google Scholar.