The Extent of GATT’s Success Essay

Introduction

GATT (General Agreement on Tariffs and Trade) was established in 1949 and remained effective up to 1993. GATT represented an agreement between several countries, and this agreement enabled them to regulate trade activities. Trade regulation mainly entailed a reduction of trade barriers and tariffs between member states. The objective was to encourage trade practices that would result in mutual trade benefits among the countries involved (Zeiler, pp.1-2). Although the establishment of GATT was a noble idea, nonetheless, the organization was faced with the challenge of implementing policies. Consequently, this was a limitation to the success of GATT. When GATT collapsed, the former member states formed the World Trade Organisation (WTO) to replace it.

Equality

Even though various provisions of the General Agreement on Tariffs and Trade advocated for equality among countries the actual implementation was a challenge. For example, some of the countries remained dominant over others, and this was a limitation to the organization’s effectiveness. Both the European Economic Community (EEC) and the United States were dominant over multilateral negotiations. The dominant member countries ignored decisions made by other GATT members. (Cline, p. 196). They favored their interests at the expense of other member countries. In this case, the developing countries were the main culprits as they lacked the power to influence decisions at meetings.

Agricultural Trade

Failure to liberalize agricultural trade has been recognized as one of the major failures experienced by GATT. This failure stemmed from the fact that GATT”s negotiations concentrated on tariff reduction, forgetting that when it comes to agricultural products, most factors that influence trade and the value of imports and exports are countries’ border and domestic factors, as opposed to tariffs (Johnson and Hou, p. 231). GATT only ratified a few border measures. They included import restriction standards, licensing, import quotas, and tariffs. GATT negotiations did not also consider domestic measures such as deficiency payments and subsidies (Zietz and Valdes, p. 72). This made the enforcement of GATT rules regarding the above-mentioned measures ineffective and impossible in some cases.

Legal Failures

During the 1980s, GATT experienced a series of failures in dealing with legal disputes. During this time, several countries changed their domestic policies. For some countries, this meant less compliance with the provisions of GATT. This was especially such powerful member states as the United States. Their new domestic policies during this period reduced their compliance and increased their resistance to the requirements of GATT (Howse 200). GATT lacked the necessary legal infrastructure to deal with the failure of member countries to comply with its requirements (Goldsmith and Posner, p. 157). Therefore, GATT failed to fulfill its intended goal. There was the need to GATT with another organization that would ensure effectiveness and efficiency in dealing with the common problems facing the organization’s member states. Consequently, the World Trade Organisation was formed to help overcome the challenges facing GATT. The provisions of the WTO were more comprehensive and were meant to get rid of the shortcomings observed during the time GATT was in force. The WTO brought a new institutional structure in areas like dispute settlement and conformity to its provisions (Jackson, p. 455).

Conclusion

GATT experienced major failures during its enforcement but this does not mean that it did not generate any successes. One of its most notable successes was the incorporation and establishment of the WTO.

Works Cited

1. Cline, William. Trade Policy in the 1980s. Washington, DC: Institute for International Economics, 1983. Print.
2. Goldsmith, Jack. Posner, Eric. The Limits of International Law. New York: Oxford University Press, 2005. Print.
3. Howse, Robert. The World Trading System. Critical Perspective on the World Economy. London: Routledge Publishers, 1998. Print.
4. Jackson, Howard. The Jurisprudence of GATT and the WTO: Insights on Treaty Law and Economic Relations. New York: Cambridge University Press, 2000. Print.
5. Johnson, David. Hou, Chi-ming. Agricultural Policy and U.S.-Taiwan Trade. Washington, DC: American Enterprise Institute Press, 1993. Print.
6. Zeiler, Thomas. Free Trade, Free World: The Advent of GATT. North Carolina: The University of North Carolina Press, 1999. Print.
7. Zietz, Joachim. Valdes, Alberto. Agriculture in the GATT: An Analysis of Alternative Approaches to Reform. Washington, DC: International Food policy Research Institute, 1988. Print.