POL 5032 Week III

What are the key premises that underpin GATT and now the WTO?  Are multi-lateral trade agreements still applicable within the world trading regime, and if not why not?

The post-World War II order on trade really begins at Bretton Woods where the United States promoted the notion of an International Trade Organization (ITO) that would serve as an international counterbalance to domestic tendencies toward protectionism.   The ITO would keep trade lines open, which would offset mercantilist tendencies.  

Protectionist interests in Congress killed the ITO and President Harry Truman advanced the idea of GATT as a temporary alternative.  In 1948 GATT became the primary organization responsible for the liberalization of international trade, through a series of rounds.

GATT was based on the principles of reciprocity and non-discrimination.  Trade concessions were reciprocal as all states agreed to lower barriers together.  Non-discrimination meant that imports from all countries would be treated the same way. 

At the Uruguay Round, held in 1993, GATT gave way to the World Trade Organization (WTO), now headquartered in Geneva.  The WTO has been dogged by a lack of progress, however,  and the DOHA round has been singularly unsuccessful in opening up further trade concessions.  As a result, nation states are turning more and more to bi-lateral agreements as the mercantilist impulse continues to fuel protectionism within certain states and to drive discriminating agreements that are often at odds with the spirit and practice of the WTO.

Moreover, the bargain between developed and developing states over TRIPS has not materialized as both Europe and the United States continue to protect their agricultural interests.  The core premise, although unstated, has to turn on whether agriculture remains a strategic interest or not. 

Trade, or in Susan Strange’s terms, the production structure, remains interesting to our core arguments as the European Union now insists on negotiating as a region with other regions.   How does this impact on nation states and the premises that underpin the WTO?