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Unit 8: World Trade Organization

8.4 the uruguay round Package: organization structure of the Wto notes

The Uruguay Round began in 1986. It was the most ambitious round to date, hoping to expand the
competence of the GATT to important new areas such as services, capital, intellectual property,
and agriculture.

Agriculture was essentially exempted from previous agreements as it was given special status in
the areas of import quotas and export subsidies, with only mild caveats. However, by the time
of the Uruguay round, many countries considered the exception of agriculture to be sufficiently
glaring that they refused to sign a new deal without some movement on agricultural products.
These fourteen countries came to be known as the “Cairns Group”, and included mostly small
and medium sized agricultural exporters such as Australia, Brazil, Canada, Indonesia, and New
Zealand.

8.5 Wto – the third Pillar in the Global Business

The third pillar of WTO policies that negatively affect developing countries is the whole issue of
tariffs. When the developing countries signed on to the Agreement in Agriculture, they were
assured of market access for their agricultural products in developed countries. But because of tariff
peaks and tariff escalations—and in spite of developed countries having fulfilled their commit ments
on tariff reductions—market access has not been achieved. In the coming round of negotiations, this
will remain one major issue: how to ensure actual tariff reductions and do away with tariff
peaks and tariff escalations, so that products of export interest to developing countries can gain
entry to developed-country markets.
The fourth pillar is like an invisible pillar. Tariffs are very often known to exporters who can
perhaps plan accordingly. But non-tariff barriers, in the WTO parlance, have affected developing-
country exports even more negatively than tariffs. Each non-tariff barrier could be the focus of a
lot of discussion. But suffice it to say that a lot of these non-tariff barriers go against the very grain
of the public pronouncements that these countries make about globalization and liberalization, as
well as against the context of a new round. It is exactly these non-tariff barriers that are limiting
exports from developing countries.
Irrespective of the kind of policies that a lot of northern countries are following, domestic agricul tural
production and rural incomes do fall in devel oping countries. And when rural incomes fall and there
is a shift away from the traditional agricultural systems, we have reduced access to food. That, in turn,
leads to migration from the rural areas.

Notes In 1994 the GATT was updated (GATT 1994) to include new obligations upon
its signatories. One of the most significant changes was the creation of the World Trade
Organization (WTO)

Did u know? WTO was founded on 1 January, 1995.
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self assessment

Fill in the blanks:
11. Council acts on behalf on the …………………. on all of the WTO affairs.
12. …………………. is generally by consensus and relative market size is the primary of
bargaining power.

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