International Trade:

URUGUAY ROUND
AGREEMENTS
URUGUAY ROUND
AGREEMENTS
The Uruguay Round was the 8th round
ofmultilateral trade negotiations (MTN)
conducted within the framework of the
General Agreement on Tariffs and Trade
(GATT), spanning from 1986 to 1993 and
embracing 123 countries as "contracting
parties". The Round led to the creation of
the World Trade Organization, with GATT
remaining as an integral part of the WTO
agreements.
HISTORICAL BACKGROUND
The round was launched in Punta del Este, Uruguay
in September 1986, followed by negotiations in
Geneva, Brussels, Washington, D.C., and Tokyo, with
the 20 agreements finally being signed in
Marrakesh—the Marrakesh Agreement—in April
1994.

The 1986 Ministerial Declaration identified

problems including structural deficiencies, spill-over
impacts of certain countries' policies on world trade
GATT could not manage. To address these issues,
the eighth GATT round (known as the Uruguay
Round) was launched in September 1986, in Punta
del Este, Uruguay.
HISTORICAL BACKGROUND
Finally, In November 1992, the US and EU settled
most of their differences in a deal known informally
as "the Blair House accord", and on April 15, 1994,
the deal was signed by ministers from most of the
123 participating governments at a meeting in
Marrakesh, Morocco. The agreement established the
World Trade Organization, which came into being
upon its entry into force on January 1, 1995, to
replace the GATT system. It is widely regarded as
the most profound institutional reform of the world
trading system since the GATT's establishment.
HISTORICAL BACKGROUND
The subjects for negotiations, the widest of any
GATT round, were tariffs, non-tariff measures,
tropical products as a priority area, natural
resource-based products, textiles and clothing,
agriculture, review of GATT articles, safeguards,
Tokyo Round agreements ad arrangements, subsidies
and countervailing measures, dispute settlement,
trade-related aspects of intellectual property rights,
trade-related investment measures and the
Functioning of the GATT System (FOGS).
HISTORICAL BACKGROUND
What happened to GATT?
The WTO replaced GATT as an international
organization, but the General Agreement still exists
as the WTO’s umbrella treaty for trade in goods,
updated as a result of the Uruguay Round
negotiations.
MAIN POINTS OF THE
AGREEMENTS
Trade is a key driver for economic development and
poverty alleviation for many developing countries.
Trade expansion has been one of the most dynamic
features of the globalization process in recent years
and developing countries have played a significant role.
The main objectives of the Uruguay Round were:
 to reduce agricultural subsidies
 to lift restrictions on foreign investment
 to begin the process of opening trade in services
like banking and insurance.
 to include the protection of intellectual property
MAIN POINTS OF THE
AGREEMENTS
The WTO Agreements are structured, for the
purpose of introducing market-economy principles
into international trade, on basis of the two ideals:
(1) reducing trade barriers, and (2) applying non-
discriminatory rules. Such approach conforms to
the traditional spirit of GATT, which was carried
over from the preamble of the GATT 1947 to the
new WTO preamble.
MAIN POINTS OF THE
AGREEMENTS
Trade is In light of the subsequent changes, two objectives
were added to the WTO.
One is environmental consideration.
The other consideration for developing countries,
which seeks to recognize that there is need for positive
efforts designed to ensure that developing countries, and
especially the least developed among them, secure a share
in the growth in international trade commensurate with
the needs of their economic development.
The WTO agreements also provide more consideration to
the interests of developing countries, because the number
of its members is by far larger than when GATT was
established and single undertaking was a condition of
entry.
MAIN POINTS OF THE
AGREEMENTS
Basic Principles of the WTO Agreements
 Principle of Most-Favored-Nation (MFN) Treatment
 Principle of National Treatment
 Principle of General Prohibition of Quantitative
Restrictions
 Principle regarding Tariffs as Legitimate Measures
for the Protection of Domestic Industries
MAIN POINTS OF THE
AGREEMENTS
Exceptions to the Basic Principles
 First is that, in order to maintain the multilateral
trade system, it is necessary to permit
exceptional measures in a controlled manner
when specific criteria are met.
 Second involves a need to consider the ability
of a country to implement its obligations based
on the degree of its economical development
MAIN POINTS OF THE
AGREEMENTS
Salient features of the WTO
(a) Non-Discrimination:
 All trading partners will be granted the most
favoured nation (MFN) status, that is, each
member state of WTO will treat every other
member state equally as the most favoured
nation doing trade.
 (2) No discrimination will be done by a member
of state between different trading states who
are also members of WTO.
MAIN POINTS OF THE
AGREEMENTS
Salient features of the WTO
(b) Free Trade:
 WTO has to work for progressive liberalisation
of trade through reduction in tariffs and
removal of quantitative restrictions on imports
by member countries.
(c) Stability in the Trading System:
 Member states are committed not to raise tariff
and non-tariff trade barriers arbitrarily.
MAIN POINTS OF THE
AGREEMENTS
Salient features of the WTO
(d) Promotion of Fair Competition:
 WTO system of multilateral trading system
provides for transparent, fair and undistorted
competition among the various countries.
(e) Special Concern for Developing Countries:
 An important feature of WTO is that it would deal
with not only the disputes in the area of trade in
goods but a whole range of issues such services
and intellectual property rights.
MAIN POINTS OF THE
AGREEMENTS
Salient features of the WTO
(f) Market Access Commitment:
 WTO agreements which seek to establish
multilateral trading system require the member
countries to undertake market access
commitment on reciprocity basis.
(g) Decision at the Ministerial Level Meeting:
 Important decisions regarding trade related
matters are to be taken at the Ministerial level
meetings.
MAIN POINTS OF THE
AGREEMENTS
Salient features of the WTO
(h) Wider Range of Issues:
 Deal with not only issues and disputes relating to trade
in goods but also the whole range of issues concerning
trade in services and intellectual property rights.
(i) Multilateral Trading System:
 Establish just and fair multilateral system of international
trade wherein the developed countries, the developing
countries, and the least developing countries all have
equal opportunities for market access of their products
in foreign countries and wherein discriminatory trade
barriers and unjust Government support to exports by
different countries have to be eliminated.
AREAS REGULATED
THE WTO AGREEMENTS
The WTO agreements cover goods, services and
intellectual property. They spell out the principles of
liberalization, and the permitted exceptions. They
include individual countries’ commitments to lower
customs tariffs and other trade barriers, and to open
and keep open services markets. They set procedures
for settling disputes. They prescribe special treatment
for developing countries. They require governments to
make their trade policies transparent by notifying the
WTO about laws in force and measures adopted, and
through regular reports by the secretariat on
countries’ trade policies.
AREAS REGULATED
WTO Agreements Cannot Be Read in
Clinical Isolation from Public International
Law (AB Report in US – Gasoline)
WTO law is a subsystem of international law and,
as such, cannot be interpreted, applied and
enforced in clinical isolation from other relevant
international treaties, customs and general
principles of law.
AREAS REGULATED
WTO Agreements comprise the
Agreements Establishing the World Trade
Organization and its Annexes.
Annexes 1A to 3 are integral parts of the
Agreement and are binding on all members of the
WTO.
In contrast, the agreements included in Annex 4
are independent agreements and, therefore,
binding only on the members that have accepted
them.
AREAS REGULATED
The Marrakesh Agreement Establishing the
World Trade Organization
This is an agreement for implementing the results
of the Uruguay Round and establishing the WTO,
which will be a framework for future multilateral
trade negotiations. The Agreement comprises
general provisions on the WTO’s organization,
membership, decision-making, etc.
AREAS REGULATED
Annex 1A: Multilateral Agreements on
Trade in Goods
 General Agreement on Tariffs and Trade 1994 (GATT
1994)
 Agreement on Agriculture
 Agreement on the Application of Sanitary and
Phytosanitary (SPS) Measures
 Agreement on Textiles and Clothing
 Agreement on Technical Barriers to Trade (TBT)
AREAS REGULATED
Annex 1A: Multilateral Agreements on Trade in
Goods
 Agreement on Trade-Related Investment Measures
(TRIMs)
 Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (Anti-Dumping
Agreement)
 Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994 (Customs
Valuation Agreement)
 Agreement on Pre-shipment Inspection (PSI)
AREAS REGULATED
Annex 1A: Multilateral Agreements on
Trade in Goods
 Agreement on Ruled of Origin
 Agreement on Import Licensing Procedures
 Agreement on Subsidies and Countervailing
Measures
 Agreement on Safeguards
AREAS REGULATED
Annex 1B: General Agreement on Trade in
Services (GATS)

Annex 1C: Agreement on Trade-Related

Aspects of Intellectual Property Rights (TRIPS)

Annex 2: Understanding on Rules and

Procedures Governing the Settlement of
Disputes (DSU)
AREAS REGULATED
Annex 3: Trade Policy Review Mechanism
(TPRM)

Annex 4: Plurilateral Trade Agreements

 Agreement on Trade in Civil Aircraft
 Agreement on Government Procurement
AREAS REGULATED
THE WTO SUBSIDIES AND
COUNTERVAILAING MEASURES (SCM
AGREEMENT)
Subsidy - consisting of the two components: a
financial contribution and a benefit.
AREAS REGULATED
THE WTO SUBSIDIES AND
COUNTERVAILAING MEASURES (SCM
AGREEMENT)
The WTO “Traffic Light” Regime - Red, Yellow,
and Green Subsidies
 PROHIBITED (“RED LIGHT”) SUBSIDIES
 NON-PROHIBITED, BUT ACTIONABLE
(“YELLOW LIGHT”), SUBSIDIES
 NON-ACTIONABLE (“GREEN LIGHT”)
SUBSIDIES
AREAS REGULATED
THE WTO SUBSIDIES AND
COUNTERVAILAING MEASURES (SCM
AGREEMENT)
The WTO “Traffic Light” Regime - Red, Yellow, and
Green Subsidies
 PROHIBITED (“RED LIGHT”) SUBSIDIES
 NON-PROHIBITED, BUT ACTIONABLE
(“YELLOW LIGHT”), SUBSIDIES
 NON-ACTIONABLE (“GREEN LIGHT”)
SUBSIDIES
Remedy “withdraw the subsidy” - Australian
leather
AREAS REGULATED
WTO/ ANTI-DUMPING AGREEMENT
(IMPLEMENTATION OF ARTICLE VI OF
THE GATT 1994)
Basic Principles
Three creates:
 Dumping is occurred
 Material injury
 A causal linkage

Why AD is widely used?

AREAS REGULATED
TRADE IN AGRICULTURE
Market Access
The European Union as a major food exporter in
the world intends to share in the forecasted
expansion of world agricultural trade. The EU will
seek to obtain improvements in opportunities for
its exporters, among other things through greater
clarity in the rules for the management of tariff
rate quotas (TRQs), including imports through
single desk buyers, and the removal of other
unjustified non-tariff barriers.
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Labour Standards in the World Trade
Organization are binding rules, which form a part
of the jurisprudence and principles applied within
the rule making institutions of the World Trade
Organization (WTO). Labour standards play an
implicit, but not an overt role within the WTO,
however it forms a prominent issue facing the
WTO today, and has generated a wealth of
academic debate.
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
The core labour standards:
 freedom of association: workers are able to
join trade unions that are independent of
government and employer influence
 the right to collective bargaining: workers may
negotiate with employers collectively, as opposed to
individually
 the prohibition of all forms of forced
labour: includes security from prison labour and
slavery, and prevents workers from being forced to
work under duress
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
The core labour standards:
 elimination of the worst forms of child
labour: implementing a minimum working
age and certain working condition requirements
for children
 non-discrimination in employment : equal pay
for equal work
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Barriers promoting to labour standards
There are some major roadblocks to the process
of recognising core labour standards within the
WTO.
Firstly, incorporating labour rights into the WTO
is not simply a question of lawand economics, but
also of politics and ethics.
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Barriers promoting to labour standards
Secondly, this issue occurs at the intersection
between trade and human rights which raises a
series of unique questions. Although the trade and
human rights regimes developed alongside each
other following WWII, in some ways they are very
different. This is because human rights law, unlike
other types of international law that are more
contractual in nature, governs how states treat
their own citizens.
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Mechanisms to incorporate core labour standards
into WTO:
 Using the General Agreement of Tariffs and Trade
 Incorporation of a Social clause
 Problems with Unilateral Trade Sanctions as an
Enforcement Mechanism
 Furtherance of the WTO and ILO Relationship
 Increased Civil Society Participation
 Recognition within the WTO Preamble
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Development Finance, Income Distribution and
Worker Rights in the Global Economy
In the year 2000, the World Bank cannot bring itself
to support the most important core worker rights of
all: freedom of association and collective bargaining.
These conclusions by the World Bank lead it to deem
freedom of association and collective bargaining, but
not labor market flexibility measures, to be political,
thereby contravening the provision of the Bank’s
Charter that prohibits the Bank from taking political
factors into account in its decisions.
AREAS REGULATED
LABOUR STANDARDS IN THE WTO
Development Finance, Income Distribution
and Worker Rights in the Global Economy
There is no balance in a two track international
trade, investment and finance regime in which
there is a rule based system for the protection of
corporate property rights, but no protection for
core worker rights
CHALLENGES TO
IMPLEMENTATION
Tariff Peaks
Many countries maintain exceedingly high tariffs in
selected agricultural and industrial products in
important markets that continue to obstruct their
important exports.

The potential for developing countries to trade

with each other is also hampered by the fact that
the highest tariffs are sometimes in developing
countries themselves.
CHALLENGES TO
IMPLEMENTATION
Tariff Peaks
Examples:
1. Tariff peaks on textile
2. Tariff peaks clothing
3. Tariff peaks fish and fish products
CHALLENGES TO
IMPLEMENTATION
Tariff Escalation
In Tariff Escalation, an importing country protects
its processing or manufacturing industry by setting
lower duties on imports of raw materials and
components, and higher duties on finished
products.
CHALLENGES TO
IMPLEMENTATION
Lack of Comprehensive Investment Rules
World Trade Organization needs to develop
comprehensive investment rules to discipline
countries’ deployment of carrots and sticks to
induce industries to invest in their markets. It
needs to establish rules for the strengthening of
disciplines on investment incentives and
establishment restrictions.
CHALLENGES TO
IMPLEMENTATION
Competition Policy
The following issues and problems complicate efforts to
develop WTO rules:
 Differences in national competition laws regarding
which practices are deemed to enhance competition
and promote economic efficiency;
 Sectoral exemptions from national antimonopoly rules;
 Absence or inadequate enforcement of national
competition policies in many WTO signatories; and
 Implementation of other trade policies or regulatory
measures that can act to constrain competition.
CHALLENGES TO
IMPLEMENTATION
Incomplete and Vague Rules With Respect
To Promotion Of Complementarity Of
Regional And Multilateral Trade Objectives
WTO obligations seek to link regionalism and
multilateralism. However, the vague and
incomplete rules in promoting the
complementarity of regional and multilateral trade
objectives hamper the possibility of correlation
and coordination between the two because the
vague and incomplete rules are subject to abuse.
CHALLENGES TO
IMPLEMENTATION
Resource Constraints
The WTO staff and budget both pale in comparison
with those of other international organizations.
Governments clearly have not distributed resources
commensurate with the responsibilities accorded
these respective organizations. The small size of the
secretariat already strains its ability to conduct legal
and economic analysis. Staffing constraints inevitably
limit the scope of joint activities that might be
undertaken with other international economic
institutions, particularly cooperatives efforts with the
International Monetary Fund (IMF) and the World
Bank to help promote “greater coherence in global
economic policy making.”
CHALLENGES TO
IMPLEMENTATION
Cumbersome and Duplicative Procedures
In The Admission To The WTO
The process of admitting new members to the
WTO needs to be standardized. Current
procedures are cumbersome and often
duplicative.
OPPORTUNITIES IN
IMPLEMENTATION
There are 164 members of the World Trade
Organization. Having to comply with set of rules
provided by the WTO and be penalized in case of
breaking such, creates a safer trading arena for
everyone.
The WTO negotiates improved trade
arrangements among its members.
Membership also lowers the costs of doing
business by removing volatility. These general
benefits extend to all members.
OPPORTUNITIES IN
IMPLEMENTATION
Three Specific Benefits
 First, the WTO grants each member Most Favored
Nation status, which means that WTO members
must treat each other the same. They give no
preferential trade benefit to any one member
without giving it to all.
 Second, WTO members have lower trade barriers
with each other. That includes tariffs, import quotas,
and regulations. Lower trade barriers allow
members larger markets for their goods. Larger
markets lead to greater sales, more jobs, and faster
economic growth.
OPPORTUNITIES IN
IMPLEMENTATION
Three Specific Benefits
 Third, around two-thirds of WTO members
are developing countries. Their membership
gives them immediate access to developed
markets at the lower tariff rate. This gives them
time to catch up with sophisticated
corporations and their mature industries. They
don't have to remove reciprocal tariffs in their
markets until later. That means developing
countries don't immediately have to open their
markets to overwhelming competitive pressure.
OPPORTUNITIES IN
IMPLEMENTATION
The WTO can stimulate economic growth and
employment
This process of trade opening takes place in the
framework of WTO rules, which take into account the
fact that some countries are better equipped than
others to open their markets widely.
Open economies tend to grow faster and more
steadily than closed economies and economic growth
is an important factor in job creation. Profitable
companies tend to hire more workers than those
posting a loss. Trade can also be a catalyst for greater
efficiency and productivity.
OPPORTUNITIES IN
IMPLEMENTATION
The WTO can help countries develop
Underlying the WTO’s trading system is the fact
that more open trade can boost economic growth
and help countries develop.
In addition, the WTO agreements are full of
provisions that take into account the interests of
developing countries. Over three-quarters of
WTO members are developing or least-developed
countries
IMPACT TO THE PHILIPPINES
Impact on Philippine Agriculture
Based on UR Agreement on agriculture, it is built
in four areas of commitment namely:
 Market access
 Domestic support
 Export Subsidies
 Sanitary measures
IMPACT TO THE PHILIPPINES
Impact of the GATT－ UR on Agriculture
Membership in the GATT alone offers a
country numerous benefits.
The UR agreement on agriculture is a major step
towards checking unfair trade practices through the
imposition of a rules-based agricultural trading system.
Compliance with GATT－ UR Requirements.
The harmonization of sanitary and phytosanitary
measures will force Philippine products to comply
with international standards, thus, result in better
quality products.
IMPACT TO THE PHILIPPINES
Continuing liberalization will help the
Philippine economy to be more
competitive

Reduction of Tariff Rates

Foreign Investment

Privatization of Corporation

Manufacturing sector