Successfully reported this slideshow.
You’ve unlocked unlimited downloads on SlideShare!
Seventh round:Tokyo Round - 1973-1979Reduced tariffs and established new regulations aimed at controlling the proliferation of non-tariffbarriers and voluntary export restrictions. 102 countries took part in the round. Concessions were made on$190 billion worth.Both from the point of view of participation and the breadth of the negotiating agenda, this was thebiggest round up to that time. The Tokyo Round was launched on 14 September 1973 at a Ministerialmeeting in Tokyo, but the negotiations were conducted largely in Geneva.The Uruguay Round began in 1986. It was the most ambitious round to date, hoping to expand thecompetence of the GATT to important new areas such as services, capital, intellectual property, textiles,and agriculture. 123 countries took part in the round. TheUruguay Round was also the first set ofmultilateral trade negotiations in which developing countries had played an active role.Agriculture was essentially exempted from previous agreements as it was given special status in the areasof import quotas and export subsidies, with only mild caveats. However, by the time of the Uruguayround, many countries considered the exception of agriculture to be sufficiently glaring that they refusedto sign a new deal without some movement on agricultural products. These fourteen countries came to beknown as the "Cairns Group", and included mostly small and medium sized agricultural exporters suchas Australia, Brazil,Canada, Indonesia, and New Zealand.The Ministerial declaration setting out the ambit for the negotiations foresaw work aimed at:(a) Tariff negotiations using the formula method,(b) Reducing or eliminating non-tariff measures,(c) Examining the possibility of reducing or eliminating all barriers in selected sectors,(d) Examining the adequacy of the multilateral safeguard system,(e) Negotiations in agriculture, taking into account the special characteristics and problems in this sector,and(f) Treating tropical products as a special and priority sector.Ministers intended that the negotiations should be concluded in 1975.The Tokyo Round negotiations were dominated by events within the United States, the EuropeanEconomic community (EEC), Japan and the relations between them. The President did not have anynegotiating authority until January 1975 when the Trade Act of 1974 was made into law. This negotiatingauthority was due to expire on 3 January 1980.The situation was complicated by the fact that 1976 was a presidential election year. The EEC hadexpanded its membership to nine on 1 January 1973 and was preoccupied with making the enlargedsystem work. Its internal coordinating system accordingly became much more complex.
Japan had achieved its transformation into a first-rate trading power and had become the subject ofprotectionist pressures in many economies. The various negotiating groups, in which the specializednegotiations economies. The various negotiating groups, in which the specialized negotiations would takeplace, were only established in February 1975. Most were chaired by GATT Secretariat personnel.The developing countries were drawn into the negotiating process much more than during the Kennedyround. This was the time of heightened developing-country expectations in that it coincided withpreparations for the New International Economic Order initiative and the intensification of the North-South dialogue.Much necessary preparatory work of a substantive nature was done between 1973 and early 1977, but noreal developments in the negotiations were possible until the new United States administration hadformulated its policies and appointed its negotiating team. Negotiations began in earnest in July 1977following a meeting between the United States and the EEC, which ironed out some of their majordifferences on policy and procedure.The two reached agreement that three should be an accelerated timetable consisting of four phases to beconcluded by January 1978.The first phase would consist of a general tariff plan, including a tariff-cutting formula using the Swissformula as a working hypothesis, and specific directives for the treatment of agriculture.The second phase would cover the tabling of requests for tariff cuts and the removal of non-tariffmeasures.Phase three would see the tabling of draft texts for the codes on non-tariff measures, and in the fourthphase participants would respond to the requests by tabling offers.By July 1978 a large group of developed countries was able to put forward a "Framework ofUnderstanding" which set out the principals elements they considered necessary for a balanced outcometo the negotiations. The developing countries objected to this package on substantive and proceduralgrounds.They objected particularly to what they saw as an attempt to leave them at the periphery of thenegotiations. The package nevertheless was an important factor in maintaining momentum as agreementemerged to conduce the negotiations by 15 December 1978.A major obstacle then turned up in the form of a section of the United States Trade Act which allowed thePresident to waive a requirement that countervailing duties be imposed on subsidized imports over thefour-year period ending on 3 January 1979. If the existing waiver lapsed, countervailing duties wouldbecome automatic. Congress appeared reluctant to renew the waiver, but it did so once the EEC declaredthat it could not conclude the negotiations unless the United States first solved its internal problems.This happened in late March 1979, and the Tokyo Round negotiations ended formally on 12 April 1979.The negotiations resulted in average cuts of tariffs by developed countries for industrial products of about35%, and average tariffs were reduced to about 4.7%, to be phased in over eight years. The Tokyo Roundresulted in nine separated agreements (six of which were called "codes") and four understandings on theaims and operation of the GATT. These agreements and understandings added considerably to GATTlaw.
Most of them were adapted further in the Uruguay Round and incorporated in the formal overalloutcome for that round. Little progress was made on systemic issues in trade in agriculturalproducts. There was agreement that negotiations should be continued after the round on thedevelopment of a Multilateral Agricultural Framework aimed at avoiding continuing politicaland commercial confrontations in this highly sensitive sector. In reality this was no more than adevice enabling the conclusion of the round as a whole and, as many expected, it did not leadanywhere once negotiations resumed.Achievements in the negotiations on tropical products were uneven, but reductions in tariffs andnon-tariff measures occurred across the full range of these products. No agreement was reachedconcerning a multilateral safeguard system, but negotiations were continued after the round,though without much success. One outcome developing countries saw as particularly importantfor them was the Enabling Clause.It was aimed at promoting an increased participation by developing counties in the global tradingsystem, and it allowed developed GATT members to accord differential treatment in favor ofdeveloping countries in the tariff and non-tariff areas. On e of its unintended effects was todiminish further the influence of developing countries in the rule-making activities in the GATT.