On the Completion of the Uruguay Round of GATT
In the middle of April 1994, representatives of 116 participating countries and of the EU signed the trade agreement which concludes the GATT's Uruguay round. This marks the completion of the most ambitious project on liberalizing world trade. Negotiations began as early as 1986 in Punta del Este (Uruguay). The GATT talks covered not only a further reduction in tariffs and quotas, but also extended to trade in agricultural products, textiles, regulations concerning cross-border investment and services, as well as a general improvement in competitive conditions in the world economy. From the very beginning the Uruguay round was plagued by strong interest conflicts between exporters of farm products on the one side and the European industrial countries and Japan on the other, which wanted to protect their own agricultural sectors. Market leaders in industrial goods and in services wanted to open up international markets for these products. The new GATT agreement is an important step towards establishing a new global economic order and an improved system for implementing the new competition rules. Starting in 1995, the new world organization WTO will apply and further develop these rules. The new accord will become fully effective over the course of several years. The industrialized countries will liberalize farm trade in several steps within six years; the time limit for liberalizing the textile markets is ten years. According to model simulations, freer trade will bring welfare gains amounting to 1 percent to 2 percent of world GDP, with the largest positive effects expected for the small open and highly developed economies of the EFTA countries. For Austria, the impact of the completion of the GATT talks will be eclipsed by the effects of Austria's – possibly concurrent – accession to the EU. By joining the EU, Austria transfers authority in trade and tariff policies to the EU and also accepts the concessions made in the Uruguay Round by the EU. Thus, two thirds of Austria's trade in goods and most categories of trade in services will not be subject directly to GATT rules but to EU rules. The remaining part of trade relations with third countries will be subject to the Uruguay agreement as it applies to the EU. Some of the improvements in the rules governing global competition parallel those implemented in the EU's Single Market. Many of the EU's trade and competition policies already apply to the Austrian economy through the treaty on the European Economic Area (EEA). The most far-reaching consequences of the GATT agreement concern the agricultural sector, where Austria's economic policy up to now has been rather autonomous. If Austria's participation in the EU's common agricultural policy did not necessitate a basic reorganization of Austria's agriculture, the obligation under the GATT treaty would require Austria in principle to move in the same direction.
|Year of publication:||
WIFO Monatsberichte (monthly reports). - Österreichisches Institut für Wirtschaftsforschung (WIFO), ISSN 0029-9898. - Vol. 67.1994, 4, p. 262-268
Österreichisches Institut für Wirtschaftsforschung (WIFO)
|Subject:||Zum Abschluß der Uruguay-Runde des GATT | On the Completion of the Uruguay Round of GATT|
|Description of contents:||Abstract|