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Draft Paper – Not to be cited without author’s permission

Structural Adjustment Packages (SAPs) by Southern governments. A central feature of these SAPs was trade liberalization including the slashing of imports tariffs and quotas, steep cuts in domestic subsidies, and the start of across the board privatization of state services and enterprises. The heyday of SAPs began in the late 1970s and continued through the early 1990s. When we examine the impacts to date of trade liberalization on Third World economies, we cannot really separate the effects of liberalization through SAPs from the effects of liberalization through the WTO, NAFTA, or other trade agreements, as we shall see in the Mexico and Africa (see Appendices 3 and 4). A central complaint of Southern governments in contemporary trade negotiations is that of “asymmetry”—that they already opened their markets unilaterally to a significant extent under SAPs. And now they are being pushed to engage in another round of tariff cuts. But if these tariff cuts are to be at the same level for Northern and Southern countries, or even if they give a slight advantage to the South, they will not erase already existing imbalances created by SAPs.

2.1.2 From the GATT to the Uruguay Round and the WTO

Over the later part of that period the central fulcrum for further trade liberalization shifted from debt negotiations to trade agreements and treaties. This began by given more substance to the General Agreement on Tariffs and Trade (GATT). The GATT was originally negotiated in 1947 to shape the Post-WWII economy by regulating tariffs and other trade regulations. However, it had little power of enforcement, only addressed trade in goods (as opposed to services, intellectual property rights like patents and copyrights, government purchasing policies, etc.), and a significant part of the world’s nations were not GATT signatories. Also notable was the exclusion of agriculture from the GATT because of food security concerns. 2

This was to change with the Uruguay Round, a series of trade talks which lasted from 1986 to 1994, and that expanded the rules of international trade to cover services and

intellectual property. countries try to reach

A trade round is the agreements on trade

name given to series of negotiations where issue such as tariff reduction. The World

Trade Organization (WTO) was created as one of the agreements of the Uruguay Round.

The WTO began life in 1995 as a new global commerce agency, transforming the GATT into a more enforceable global trade code based on a system of sanctions for non- compliance. The stated objectives of the WTO include “raising standards of living, ensuring full employment and a large and steadily growing volume of real income and

effective demand, and expanding the production other words, economic development based on

of and trade the market.


goods and services,” in This means that WTO

agreements are meant basic mechanisms: 1) One other important

to introduce free market reducing trade barriers, principle, at least in

principles into international trade, via two and 2) applying nondiscriminatory rules. theory, is consideration for developing


The WTO recognizes “that there is need for positive

ensure that developing countries, and especially the least developed

a share in the growth of economic development.” 3





efforts designed to among them, secure the needs of their


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