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Globalization

Globalization. Ch 3: pg 96-105 A discussion on the Uruguay Round, the WTO and their impact on an increasingly globalized trading regime . Uruguay Round. Pressure on GATT increased due to increased globalization New dialogue attempts Bilateral, the Quad

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Globalization

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  1. Globalization Ch 3: pg 96-105 A discussion on the Uruguay Round, the WTO and their impact on an increasingly globalized trading regime

  2. Uruguay Round • Pressure on GATT increased due to increased globalization • New dialogue attempts • Bilateral, the Quad • All restate commitment to open trade

  3. Goals of the Uruguay Round • Review codes on NTBs set in Tokyo (1973-79) • Action on GATT dispute settlement procedures • Continuation of negotiations on a safeguards code • Tie agriculture into the GATT system • Consider new codes for high technology sectors and for service industries

  4. Uruguay Round • GATT was widely seen as a system on the verge of collapse • Sept 1986: special session of GATT (Uruguay Round) met • Established four broad categories of negotiating groups to focus on: • Issues discussed in earlier rounds that needed broad acquiescence • Concerns of developing countries • Mandates to reform existing GATT rules/mechanisms • Broaden the scope of GATT into nontraditional areas

  5. Responses to Uruguay Round • Developing Nations • Wanted to focus on unfinished business from the Tokyo Round • Industrialized nations in general • Wanted to modernize GATT by broadening its scope to deal with new areas of trade • EU and Japan • Concerned about the issue of sovereignty • Agreement proved difficult in Uruguay

  6. Uruguay Rd. by 1993 Close to Failing • Main conflict was between rich and poor nations… esp. on agriculture • US proposal: eliminate all direct farm subsidies • Cairns grp agreed; Japan opposed; EU saw its value, but was internally divided on it • Role of Pres. Clinton: speed it up! (1993) • Dec 1-15: important progress made in agri. subsidies, A/V svcs, & financial svcs • Uruguay was then declared “successful” • The agreement was signed in Marrakesh on 1 Apr. 1994; enforced on 1 Jan. 1995

  7. The Agreement at Marrakesh • 400 pg doc + another 22,000 pgs of detailed tariff schedules • Eliminated or reduced • Tariffs (further cuts) • Agri subsidies (reduced) • Textile and clothing quotas (elim. over 10 yrs) • New rules on • Services, intellectual property, trade-related services • New, binding procedures to settle trade disputes • Established the World Trade Organization (based in Geneva, replaced GATT)

  8. Accomplishments of the Marrakesh Agreement (Uruguay Round) • Extended the world trade regime in agriculture in a significant way for the first time • Many agri. Barriers remained, but it improved market access for many agri. products • Eliminated agri. Quotas and allowed them to be replaced by tariffs • Process of rules development (which began in Tokyo) was expanded • Esp. important was the Agreement on Safeguards • Modernized the int’l trading system with new rules for certain issues: • Services (GATs), intellectual property (TRIPs), foreign direct investment (TRIMs)

  9. Background to New Trade Challenges • The WTO and subsequent U.R. agreements became the foundation for further globalization of world trade • Liberalized markets + new info and computing technology = easier and cheaper flow of $, people, and ideas • LDCs, china and Taiwan and former Communist nations joined WTO by 2001

  10. New Trade Challenges • Certain issues remained unresolved: • Agriculture remained highly protected and barriers to trade was particularly tough on LDCs • safeguards and dumping wasn’t fully addressed by U.R. • National policies were affected regarding competition… • traditional barriers fell but new ones emerged via dominant local competitors who followed practices that restrained trade • Environmental dumping became a new concern • Tuna-dolphin case. Mexico vs. U.S. Mexico won. • The functioning of the WTO (as an IGO) • NGOs wanted a voice and access to decision-making • WTO accused of lacking transparency

  11. Shifting Power Relationships • Changes • Resurgence of the US as an economic power • Restructured economy; more flexible; strong macroecon. health; strong avg annual growth rate • Led the way in information and communication technologies • Yet, increasingly unable to lead the trading system • Economic weakness of Japan • Experiencing stagflation in the early 1990s • Trade was still important, but the value of the yen was volatile and was engaged in strong competition from other SE Asian nations • Europe continued to expand it membership • But was also trying to be more internally integrated • Euro was created, ties with Mediterranean region and E. Europe were strengthened • “New vitality and sense of direction that was lost in the 1980s”

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