Course : Law in International
Business
Lecturer : Dr. Shidarta, S.H., M.Hum.
Date :
14 May 2013 (Session 9)
Topic : GATT in International Trade Law
Method : GSLC
GATT is one
of the sources of law in regulating inter-State trade policy and the rules of
trade between businessmen.
GATT was
formed in 1947 and brought two changes:
1. GATT and
the WTO to take over the role of making it as one attachment WTO rules.
2. GATT
principles to frame rules for new fields in the WTO agreements. For example
GATS, TRIMS, TRIPS.
Purpose of
establishing the GATT: Creating a climate of international trade are obvious to
the business community and sustainable trade liberalization, trade jobs and a
healthy climate.
The main
objective of GATT:
1) Improving the living conditions of human
beings
2) Increase
employment opportunities
3) Increase
the utilization of the world’s natural resources
4) Increase
the production & exchange of goods
The main
function of GATT:
1. A set of
regulations governing multilateral trade transactions undertaken by GATT member
countries.
2. As a forum
for trade negotiations and trade liberalization.
3. Keeping
the rules clear for the opening of the national market.
Background of
GATT:
1.
Formed
as a temporary container after the World War two.
2.
The
need was felt true multilateral institutions
3.
To
prevent a recurrence of the practice in the 1930s protectionism.
Organizational
systems of GATT:
1.
A
mechanism of decision-making in the WTO is by consensus.
2.
Voting with one country, one vote to win a
majority.
Organizational
structures of GATT:
1.
Ministerial
Conference (Highest decision-making)
2.
General
Council (Daily Executive shall consist of representatives of the member)
3.
Council
for Trade in Goods (Implementation of agreements in the field of goods)
4.
Council
for Trade in Services (Implementation of agreements in the field of service)
5.
Council
for Trade Related Aspects of Intellectual Property
6.
Dispute
Settlementy Body (Settlement of disputes between members of the forum)
Terms of
trade in GATT:
1.
38th
article.
2.
Tokyo
round of negotiations produced is anti-dumping regulations, subsidies and
non-tariff provisions or sectoral issues.
3.
Multifibre
arrangements.
Principles of
GATT:
1.
Most
favored nation (Giving other countries the same treatment)
2.
National
treatment (Must be the same as any imported products in the country)
3.
Prohibition
of quantitative restrictions (The export/import can be in any form)
4.
Protection
through tariff (Protection of domestic industry through tariff)
5.
Reciprocal
(Mutually beneficial to both parties)
6.
Specially
for countries that are still developing (Help economic growth)
Work of the
Goods Council:
The Goods
Council is the one handling the operation of the GATT Agreement & the
committees’ duties, working groups & working parties on sectors of activity
covered by the Agreement. Which are:
1.
Agriculture
2.
Market
access for goods
3.
Sanitary
& phytosanitary measures
4.
Subsidies
& countervailing measure
5.
Anti-dumping
6.
Customs
valuation
7.
Rules
of origin
8.
Import
licensing
9.
Investment
10. Safeguards
11. State trading enterprises
12. Information technology agreement
Examples of
current GATT events:
·
December
2010 – The European Union expresses support for Russia’s bid to join the WTO
after Moscow agreed to cut timber export tariffs & rail freight fees.
Russia is the only major economy outside the WTO. China says it plans to appeal
against WTO ruling that the US was entitled to impose extra duties on China tyre
imports.
·
December
2011 – Russia finally joins the WTO after 18 years negotiating its membership.
Switzerland brokered a deal to persuade Georgia to lift its veto, which it had
imposed after the 2008 Russo-Georgian war. WTO agrees terms for Samoa & Montenegro
to join in 2012.
·
January
2012 – The WTO rejects China’s appeal against a ruling that it broke free trade
rules by imposing quotas & taxes on exports of key materials.
Reference:
Conclusion:
GATT is more
focused on protecting individual rights & it is also an international
agreement that contains different set of economic goals than other
international agreement organizations have established. GATT also contains
precise obligations to manage trade relations & it has also resolved a lot
conflicts between the contracting parties.
