ALFRED CELLAM & LEON RETAM & LEDA BALLA

The General Agreement on Tariffs and Trade (GATT

From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) provided the rules
for much of world trade and presided over periods that saw some of the highest growth rates
in international commerce !t seemed well"esta#lished, #ut throughout those 4$ %ears, it was a
provisional agreement and organi&ation
The original intention was to create a third institution to handle the trade side of international
economic cooperation, 'oining the two ()retton *oods+ institutions, the *orld )an, and the
!nternational -onetar% Fund
The GATT !ears" from #a$ana to Marra%esh
The *T./s creation on 1 0anuar% 1991 mar,ed the #iggest reform of international trade since
after the 2econd *orld *ar !t also #rought to realit% 3 in an updated form 3 the failed
attempt in 1948 to create an !nternational Trade .rgani&ation
4uring that period, the trading s%stem came under GATT, salvaged from the a#orted attempt
to create the !T. GATT helped esta#lish a strong and prosperous multilateral trading s%stem
that #ecame more and more li#eral through rounds of trade negotiations )ut #% the 1985s the
s%stem needed a thorough overhaul This led to the 6rugua% 7ound, and ultimatel% to the
*T.
Did GATT s&''eed(
GATT was provisional with a limited field of action, #ut its success over 4$ %ears in
promoting and securing the li#erali&ation of much of world trade is incontesta#le 8ontinual
reductions in tariffs alone helped spur ver% high rates of world trade growth during the 1915s
and 1995s 3 around 8: a %ear on average And the momentum of trade li#erali&ation helped
ensure that trade growth consistentl% out"paced production growth throughout the GATT era,
a measure of countries/ increasing a#ilit% to trade with each other and to reap the #enefits of
trade The rush of new mem#ers during the 6rugua% 7ound demonstrated that the multilateral
trading s%stem was recogni&ed as an anchor for development and an instrument of economic
and trade reform
The )r&g&a! Ro&nd* +assing from GATT to ,TO
The last and largest GATT round, was the 6rugua% 7ound which lasted from 1989 to 1994
and led to the *T./s creation *hereas GATT had mainl% dealt with trade in goods, the *T.
and its agreements now cover trade in services, and in traded inventions, creations and designs
(intellectual propert%)
,hat is the ,orld Trade Organi-ation(
The *orld Trade .rgani&ation (*T.) deals with the rules of trade #etween nations at a
glo#al or near"glo#al level )ut there is more to it than that
A.o$e all* it/s a negotiating for&m 0 ;ssentiall%< the *T. is a place where mem#er
governments go, to tr% to sort out the trade pro#lems the% face with each other The first step
is to tal, The *T. was #orn out of negotiations, and ever%thing the *T. does is the result
of negotiations
1t/s a set of r&les 0 At its heart are the *T. agreements, negotiated and signed #% the
#ul, of the world/s trading nations These documents provide the legal ground"rules for
international commerce The% are essentiall% contracts, #inding governments to ,eep their
trade policies within agreed limits
And it hel2s to settle dis2&tes 0 This is a third important side to the *T./s wor, Trade
relations often involve conflicting interests Agreements, including those painsta,ingl%
negotiated in the *T. s%stem, often need interpreting The most harmonious wa% to settle
these differences is through some neutral procedure #ased on an agreed legal foundation That
is the purpose #ehind the dispute settlement process written into the *T. agreements
Born in 3445* .&t not so !o&ng
The *T. #egan life on 1 0anuar% 1991, #ut its trading s%stem is half a centur% older 2ince
1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the
s%stem
The agreements
The *T. Agreements cover goods, services and intellectual propert% The% spell out the
principles of li#erali&ation, and the permitted e=ceptions The% include individual countries/
commitments to lower customs tariffs and other trade #arriers, and to open and ,eep open
services mar,ets
The agreements for the two largest areas 3 goods and services 3 share a common three"part
outline, even though the detail is sometimes >uite different
? The% start with .road 2rin'i2les@ the General Agreement on Tariffs and Trade
(GATT) (for goods), and the General Agreement on Trade in 2ervices (GAT2) (The third
area, Trade"7elated Aspects of !ntellectual Aropert% 7ights (T7!A2), also falls into this
categor% although at present it has no additional parts)
? The% come e6tra agreements and anne6es dealing with the special re>uirements of
specific sectors or issues
? Finall%, there are the detailed and length% s'hed&les (or lists of 'ommitments made
#% individual countries allowing specific foreign products or service"providers access to their
mar,ets
+rin'i2les of the trading s!stem
The *T. agreements are length% and comple= #ecause the% are legal te=ts covering a wide
range of activities The% deal with@ agriculture, te=tiles and clothing, #an,ing,
telecommunications, government purchases, industrial standards and product safet%, food
sanitation regulations, intellectual propert%, and much more )ut a num#er of simple,
fundamental principles run throughout all of these documents These principles are the
foundation of the multilateral trading s%stem
Not: Multilateral trading system ... the s%stem operated #% the *T. -ost nations 3
including almost all the main trading nations 3 are mem#ers of the s%stem )ut some are not,
so (multilateral+ is used to descri#e the s%stem instead of (glo#al+ or (world+
The 2rin'i2les
The trading s%stem should #e
? 7itho&t dis'rimination 3 a countr% should not discriminate #etween its trading partners
(giving them e>uall% (most"favoured"nation+ or -FB status)< and it should not discriminate
#etween its own and foreign products, services or nationals (giving them (national
treatment+)<
? freer 3 #arriers coming down through negotiation<
? 2redi'ta.le 3 foreign companies, investors and governments should #e confident that trade
#arriers (including tariffs and non"tariff #arriers) should not #e raised ar#itraril%< tariff rates
and mar,et"opening commitments are (#ound+ in the *T.<
? more 'om2etiti$e 3 discouraging (unfair+ practices such as e=port su#sidies and dumping
products at #elow cost to gain mar,et share<
? more .enefi'ial for less de$elo2ed 'o&ntries 3 giving them more time to ad'ust, greater
fle=i#ilit%, and special privileges
Trade without discrimination
38 Most9fa$o&red9nation (MFN" treating other 2eo2le e:&all! 6nder the *T.
agreements, countries cannot normall% discriminate #etween their trading partners Grant
someone a special favour (such as a lower customs dut% rate for one of their products) and
%ou have to do the same for all other *T. mem#ers
;8 National treatment" Treating foreigners and lo'als e:&all! imported and locall%"
produced goods should #e treated e>uall% 3 at least after the foreign goods have entered the
mar,et The same should appl% to foreign and domestic services, and to foreign and local
trademar,s, cop%rights and patents
Bational treatment onl% applies once a product, service or item of intellectual propert% has
entered the mar,et Therefore, charging customs dut% on an import is not a violation of
national treatment even if locall%"produced products are not charged an e>uivalent ta=
BAR1< B)LDAN & ON)R =>R?@
;AAABC3ADE & ;AAABC3;AB
1*CAT !2 *T.D
E*T./2 G;B;7AF A!-
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4GATT 1994
1*T.IGATT Arinciples
9GF.)AF!JAT.B
$T67H;K AB4 TC; *T.
,#AT 1F ,TO(
*T. is the onl% glo#al international organi&ation dealing with the rules
of trade #etween nations At its heart are the *T. agreements, negotiated
and signed #% the #ul, of the worlds trading nations and ratified in their
parliaments The goal is to help producers of goods and services, e=porters
and importers conduct their #usiness
,TO/F GENERAL A1M
The *T. aims to provide its mem#ers and the pu#lic at large with
>uantitative and >ualit% information in relation to economic and trade polic%
issues .n the statistic side its+ !nternational trade statistics+ report is
pu#lished annuall% !t provides an overview of #oth short and long term
developments in world trade in the two principal sectors, merchandise and
commercial services
BAC@GRO)ND" T#E T,O GATTF
The original General Agreement on Tariffs and Trade, now referred to as
GATT 194$, provide #asic rules of the multilateral trading s%stem from 1
0anuar% 1948 until the *T. entered into force on 1 0anuar% 1991These
rules, which dealt onl% with trade in goods, were supplemented and modified
#% man% further legal instruments adopted over the 4$ %ears #etween 1948
and 1991, as a result of multilateral negotiations, protocols of accession,
waivers and other decisions
GATT 344B
GATT 1994, which sets out the main *T. rules that #ear specificall% on
trade in goods, is legall% distinct from GATT 194$
The -arra,ech Agreement ;sta#lishing the *T. states that the General
Agreement on tariffs and trade 1994 (GATT 1994) is on instrument legall%
distinct from the General Agreements on Tariffs and Trade
The GATT 1994 as set out in Anne= 1A to the *T. Agreement, consists of@
a) the provisions of GATT 194$
#) the provisions of legal instruments which entered into force under GATT
194$ #efore the date of entr% into force of the *T. Agreements
c)the under standings on the interpretation of a num#er of GATT Articles,
adopted at the end of the 6rugua% 7ound
d)the -arra,ech Arotocol to GATT 1994
,TOGGATT +rin'i2les
*T. em#odies man% reciprocal rights and o#ligations for trading countries
and its core principle is the -ost"Favoured"Bations (-FB) clause 6nder this,
trade must #e conducted on the #asis of non"discrimination"all mem#ers are
#ound to accord each other treatment in tariffs and trade as favoura#le as the%
give to an% other mem#er"countr%
A second principle is that, to the ma=imum e=tend possi#le, trade protection
should #e given to domestic industries not through non"tariff measures such as
>uantitative restrictions, ar#itrar% technical standards, and health regulations,
etc< #ut onl% through the customs tariff, so that the e=tent protection is clear and
competition is still possi#le
.ther #asic provisions are+ national treatment+(non"
discrimination),transparenc% of trade rules, and general prohi#ition of
>uantitative restrictions or >uotas
A final principle em#odied in the *T. is Lfair competition/ Fair competition in
the GATT conte=t is reflected in a num#er of provisions Government
su#sidi&ation of e=ports is prohi#ited andMor countervaila#le #% importing
countries
8ertain t%pes of the #ehaviour pursued #% e=porting firms (as opposed to
governments) are also countervaila#le Thus, dumping #% e=porters"which
usuall% mean charging a price in the e=port mar,et that is less than what is
charged in the home mar,et Nma%#e offset #% importing countr% government/s
through the imposition of an anti"dumping dut% if the dumping in'ures domestic
competitors
GLOBAL1HATON
The term (Glo#ali&ation+ descri#es the increased mo#ilit% of goods, services,
la#our, technolog% and capital throughout the world Although glo#ali&ation
isn/t a new development, its pace has increased with the advent of new
technologies, especiall% in the area of telecommunications
T)R@E= AND T#E ,TO
149 mem#ers on 4 April E55G
Tur,e% has #een a mem#er of *T. since E9 -arch 1991
M)#AMMED OI)H OLG)N
;AA3BJ3AED %tisat 118 >Kretim
GATT / WTO & WORLD TRADING SYSTEM
General Agreement on Tariffs and Trade (GATT
The original intention was to create a third institution to handle the trade side of
international economic co"operation 'oining the two ()retton *oods+ institutions, the *orld
)an, and the !nternational -onetar% Fund .ver 15 countries participated in negotiations to
create an !nternational Trade .rgani&ation (!T.) as a speciali&ed agenc% of the 6nited
Bations The draft !T. 8harter was am#itious !t e=tended #e%ond world trade disciplines, to
include rules on emplo%ment, commodit% agreements, restrictive #usiness practices,
international investment, and services
;ven #efore the tal,s concluded, EG of the 15 participants decided in 1949 to negotiate
to reduce and #ind customs tariffs *ith the 2econd *orld *ar onl% recentl% ended, the%
wanted to give an earl% #oost to trade li#erali&ation, and to #egin to correct the legac% of
protectionist measures which remained in place from the earl% 19G5s
First round of negotiations resulted in 41,555 tariff concessions affecting O15 #illion of
trade, a#out one fifth of the world/s total This EG countries also agreed that the% should
accept some of the trade rules of the draft !T. 8harter The com#ined pac,age of trade rules
and tariff concessions #ecame ,nown as the General Agreement on Tariffs and Trade !t
entered into force in 0anuar% 1948, while the !T. 8harter was still #eing negotiated The EG
#ecame founding GATT mem#ers
After this first round of negotiations in Geneva N 2wit&erland, GATT improved #% $
more rounds of negotiations Finall% in the 8th round named 6rugua% 7ound creation of
*T. covered
World Trade Organization WTO
*T. located in Geneva, 2wit&erland, created #% 6rugua% 7ound (1989 N 1994)
negotiations and esta#lished in 1 0anuar% 1991 As of 4 April E55G, 149 countries have
mem#ership of *T.
Functions of WTO
? Administering *T. trade agreements
? Forum for trade negotiations
? Candling trade disputes
? -onitoring national trade policies
? Technical assistance and training for developing countries
? 8ooperation with other international organi&ations
What is WTO
There are a num#er of wa%s of loo,ing at the *T. !t/s an organi&ation for
li#erali&ing trade !t/s a forum for governments to negotiate trade agreements !t/s a place for
them to settle trade disputes !t operates a s%stem of trade rules
Above all, its a negotiating forum: ;ssentiall%, the *T. is a place where mem#er
governments go, to tr% to sort out the trade pro#lems the% face with each other
1t/s a set of r&les" At its heart are the *T. agreements, negotiated and signed #% the
#ul, of the world/s trading nations These documents provide the legal ground"rules for
international commerce The% are essentiall% contracts, #inding governments to ,eep their
trade policies within agreed limits Although negotiated and signed #% governments, the goal
is to help producers of goods and services, e=porters, and importers conduct their #usiness,
while allowing governments to meet social and environmental o#'ectives
1t hel2s to settle dis2&tes" This is a third important side to the *T./s wor, Trade
relations often involve conflicting interests Agreements, including those painsta,ingl%
negotiated in the *T. s%stem, often need interpreting The most harmonious wa% to settle
these differences is through some neutral procedure #ased on an agreed legal foundation That
is the purpose #ehind the dispute settlement process written into the *T. agreements
PRINCIPALS OF THE WORL TRAIN! S"STE#
$% Trade &ithout discri'ination
a) Most-favoured-nation (MFN):
6nder the *T. agreements, countries cannot normall% discriminate #etween their
trading Aartners Grant someone a special favour (such as a lower customs dut% rate for one of
their products) and %ou have to do the same for all other *T. mem#ers
This principle is ,nown as most"favoured"nation (-FB) treatment !t is so important
that it is the first article of the General Agreement on Tariffs and Trade (GATT), which
governs trade in goods -FB is also a priorit% in the General Agreement on Trade in 2ervices
(GAT2) and the Agreement on Trade"7elated Aspects of !ntellectual Aropert% 7ights (T7!A2)
, although in each agreement the principle is handled slightl% differentl% Together, those three
agreements cover all three main areas of trade handled #% the *T.
. National Treatment"
!mported and locall%"produced goods should #e treated e>uall% " at least after the
foreign goods have entered the mar,et The same should appl% to foreign and domestic
services, and to foreign and local trademar,s, cop%rights and patents
; Freer Trade
2ince GATT/s creation in 194$"48 there have #een eight rounds of trade negotiations
A ninth round, under the 4oha 4evelopment Agenda, is now underwa% At first these focused
on lowering tariffs (customs duties) on imported goods As a result of the negotiations, #% the
mid"1995s industrial countries/ tariff rates on industrial goods had fallen steadil% to less than
4: .pening mar,ets can #e #eneficial, #ut it also re>uires ad'ustment The *T. agreements
allow countries to introduce changes graduall%, through (progressive li#erali&ation+
4eveloping countries are usuall% given longer to fulfil their o#ligations
D +redi'ta.ilit!
*ith sta#ilit% and predicta#ilit%, investment is encouraged, 'o#s are created and
consumers can full% en'o% the #enefits of competition 3 choice and lower prices The
multilateral trading s%stem is an attempt #% governments to ma,e the #usiness environment
sta#le and predicta#le
!n the *T., when countries agree to open their mar,ets for goods or services, the%
(#ind+ their commitments For goods, these #indings amount to ceilings on customs tariff
rates 2ometimes countries ta= imports at rates that are lower than the #ound rates Fre>uentl%
this is the case in developing countries !n developed countries the rates actuall% charged and
the #ound rates tend to #e the same
B +romoting Fair Com2etition
The rules on non"discrimination 3 -FB and national treatment 3 wich we
e=plained #efore are designed to secure fair conditions of trade 2o too are those on dumping
(e=porting at #elow cost to gain mar,et share) and su#sidies The issues are comple=, and the
rules tr% to esta#lish what is fair or unfair, and how governments can respond, in particular #%
charging additional import duties calculated to compensate for damage caused #% unfair trade
5 En'o&raging de$elo2ment and e'onomi' reform
The *T. s%stem contri#utes to development .n the other hand, developing countries
need fle=i#ilit% in the time the% ta,e to implement the s%stem/s agreements And the
agreements themselves inherit the earlier provisions of GATT that allow for special assistance
and trade concessions for developing countries
.ver three >uarters of *T. mem#ers are developing countries and countries in
transition to mar,et economies 4uring the seven and a half %ears of the 6rugua% 7ound, over
95 of these countries implemented trade li#erali&ation programmes autonomousl%
Tur,e% has #een a mem#er of *T. since E9 -arch 1991,
For personal interest
Goods schedules of Tur,e%,
2ervices schedules and -FB e=emptions of Tur,e% ,
Trade Aolic% 7eviews of Tur,e%,
4ispute cases involving Tur,e%,
are can #e #rowsed on http@IIwwwwtoorgIenglishIthewtoPeIcountriesPeItur,e%Pehtm
Mostl! &sed 7ords and terms in this to2i'
Agreement" anlaQma, muta#a,at
Tariff" tarife, gRmrR, vergisi
1ntention" ni%et, ma,sat
Negotiation" gSrRQme
Draft" tasla,
Charter@ #e%anname
Am.itio&s@ hTrslT, a&imli
Bind" %asa gRcR ile &orunlu ,Tlma,, #aUlama,
Boost" teQvi, cesaretlendirme, canlandTrma
+rote'tionist" %a#ancT mallara aUTr gRmrR, vergileri u%gula%ara, i&lenen ,orumacTlT, polt,s
Remain@ ,alma,
Con'ession" imti%a&, a%rTcalT,
Dis2&te" anlaQma&lT,, u%uQma&lT,
Essentiall!" aslTnda, esasen
B&l%" ;sas ,TsTm, en Snemli ,TsTm
Confli't" u%uQma&lT,, VatTQma
+ainsta%ingl!" 4i,,atlice, S&enlice
1nter2ret" %orumlama,, tercRme etme,
Fa$o&red" Ha%rTlan
En'o&rage" %Rre,lendirme, cesaretlendirme
M&ltilateral" Wo, %anlT
Attem2t" teQe##Rs
Commitment" taahhRt
Com2ensate" ta&inat Sdeme,
1m2lement" %erine getirme,
K6B62 ;F; X J;KB;A 2Y8AB X B678AB )AFW!B
E5554915$1 E55549119$ E5554915EG
,hat is the ,TO(
The *orld Trade .rgani&ation (*T.) is the onl% glo#al international organi&ation
dealing with the rules of trade #etween nations At its heart are the *T. agrements,
negotiated and signed #% the #ul, of the world/s trading nations and ratified in their
parliaments The goal is to help producers of goods and sevices, e=porters,and importers
conduct their #usiness
Lo'ation" Geneva, 2wit&erland
Esta.lished"1 0anuar% 1991
Created .!" 6rugua% 7ound negotiations (1989"94)
Mem.ershi2" 149 countries (as of 4 April E55G)
B&dget" 114 million swiss francs for E55G
Fe'retariat staff" 115
F&n'tions"
8 Administering *T. trade agrements
8 Forum for trade negotiations
8 Candling trade disputes
8 -onitoring national trade policies
8 Technical assistance and training for developing countries
8 8ooperation with other international organi&ations
T&r%e! and the ,TO
Tur,e% acceded to the GATT in 1911 under the Torgua% Arotocol as a developing countr%
and has participated in all rounds of all rounds of multilaterel trade negotiations activel%
including the 6rugua% 7ound with the single underta,ing signed in -arra,esh on 11 April
1994, Tur,e% #ecame an original -em#er of *T. on E9 -arch 1991 and #ound #% the
o#ligations of all 6rugua% 7ound Agrements e=cluding the Alurilaterel Agrements
The main su#'ects of 6rugua% 7ound "
8 8ustoms ta=es in industries
8 Te=tiles and 8lothing
8 !ntellectuel and !ndustrial Aropert% 7ights
8 Agriculture
8 2ervices
8 Anti"damping
8 Goverment Aids
8 The pu#lic tenders
8 GATT rules
8ustoms Ta=es
The first impact of 6rugua% 7ound on Tur,e%/s econom% come into #eing at tarrifs
The result of lower custom ta=es 4istance ;ast/s and the 8entral ;urope/s poor">ualit% goods
enter tur,e% mar,et The consumer will #e interested these goods , #ecause the% are cheap
Te=tiles and 8lothing
.ne of the most importent aspects of the 8ustoms 6nion #etween Tur,e% and the
;uropen 6nion is the Tur,e%/s adoption of the ;6/s te=tiles and clothing restraints included
in the 8ommon 8ommercial Aolic% measures, in conformit% with the Article ZZ![ of GATT
1994
7emove customs ta=es and amount restricts provide e=port easiness to tur,e%/s te=tile and
clothes in short and middle fi=ed term
!ntellectuel and !ndustrial Aropert% 7ights
when pruducers wor,s imitation techonolog% the industrialed countries #e faced with
difficults Tntellectual and industrial propert% rights/ acceptance increase Tur,e%/s confidence
in international mar,ets and the foreign capitals movement force
Agriculture
2u#ventions #ring forth wrong competitionswhen support politics in agricultere reduce
it is a pro#lem for countries tr%ing development agriculture econom%
2ervices
Tur,e% has advanced in service sector in last ten %ears !t can enter international
competitions li,e in #an,ing, transportations and tourism
Anti"damping and Goverment Aids
!n generall%, goverment aids and encouragement e=port politics are prohi#ition in
international trade Tur,e% continue encouragement politics 8\E]15 %ears)ut it wouldn/t #e
e=cessive
Au#lic Tenders
7egional and local administration/s wor,s #e ta,en international pu#lic tenders contents
Aarticularl%, this new practise effect Tur,e%/s contractor firms !t wouldn/t cause a pro#lem
#ecause local firms have superior competitive force in international tender
Fome GATT r&les in )r&g&a! Ro&nd/s r&les interest T&r%e! 'losel!"
LM118 r&le " interest 2tate ;conom% ;nterprises(2;;) 2;; don/t conform for instance
standarts clear The privati&ation inevita#le for 2;;
L118 and LM1118 R&les"gets news a#out )alance of Aa%ments/ aims and trade measures
8ontract Aarts appl% to less effective precaution in trade and the% can/t do active something
onl% arrange the )alance of Aa%ments for this appl%ing restrict trade policies will #e
imposi##le in the future
LL1M8 r&le" this rule concerning custom union and free trade &one The rules determine in
economical unions
Con'l&sion
Tur,e%, commited to the e=pansion of the world trade, will further strengthen its
#ilateral relations with all countries, including those which are not %et integrated into the
multilateral trading s%stem esta#lished under the *T. s%stem