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WTO [World Trade Organization]: Basic History of GATT [General Agreement on Trade and
Tariffs] / WTO [World Trade Organization]
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92
4
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1
�LWK.IM.JI'OUUU
I'dperv «(flcUiuf'»s with (Jthet Institutions
John H Jtukson
The Uruguay
^ound
and the
WTO: New
Opportunities
for the
Bretton
Woods
System
March
^ohn /.uJrson is (lit lltsstl (: Vnlfm,.
P'ojtsior oj Ltiw al ihr (/ini'risily oj
Micb,gan Law School
1994
After at least six years ol preparation plus almost eiylit years of negotiations,
most of the major issues ol the Uruguay Round were concluded in December
1993. One of the important features of the December text was the new draft
charter for an international organization to oversee the world trading system
This new organization is called the W T O — W o r l d Trade Organization It is
the purpose of this paper to explore the role of the W T O m the broader Bretton
Woods system of international economic relations.
From Bretton Woods to the Uruguay Round—
Reform of the GATT System
As is well known, the Bretton Woods conference of 1944 established the charters for the World Bank (IBRD) and the International Monetary Fund (IMF).
Participants at this conference recognized the need for a third institution for
the subject of international trade, although they did not feel able at Bretton
Woods to undertake a draft of that institution. This was partly because the
1944 conference was oriented toward monetary problems and was convened
by and for the monetary authorities of the participating states rather than the
trade authorities Consequently one of the first tasks of the new United Nations and its ECOSOC (Lconomic and Social Council) in 1946 was to launch
preparations for an International Trade Organization—ITO
A scries of conferences were
held in 1946, I947and 1948 to prepare a draft I T O charter At the
same time nations were invited to
participate in negotiations for a
General Agreement on Tariffs and
Trade which would be a treaty con
taining reciprocal obligations to reduce tariffs, following the pattern of
United States treaties negotiated
under authority delegated to the US
President in the 1934 Reciprocal
Trade Agreements Act, and successor legislation of the same type At
the 1947 conference in t_,cnevn,
both a CATT agreement and a draft
I T O charter were completed. The
I T O Charter draft was latei finalized at Havana in 1948, while the
C A T T came provisionally into force
at the beginning ol 1948
The I T O Charter was an ambitious undertaking — perhaps too
ambitious It not only cieated an
organization, but it set forth extensive rules for its members to follow
regarding international trade The
draft Charter was submitted to nations for ratification, but the US Congress refused to approve the Charter,
and so by 1951 it was clear that the
I T O would not come into being. That
left the GATT to evolve over time
into the major treaty instrument for
international trade.
The GATT was never intended to
be an organization, and in the theory
of its early years, it was not an organization. Partly this related to the
structtire of the US constitutional and
statutory law which authorized the
President to enter a CATT The Presi
dent had statutorily delegated authority to accept a trade agreement, but
an organization charter required
Congressional approval Indeed,
c o m p o u n d i n g the anomaly, the
G A T T treaty instrument itself has
never come into force It is applied
only by a Protocol ol Provisional
A p p l i c a t i o n , which however does
technically apply the C A T T rules as
international law obligations But because of this pailicular history, the
C-7 19
�B M / U I J M Wui.nl'. I o o k i n c ) I I I O w ( u l u r i :
CAT I lins no i r c n t y clauses c o n c e r n i n g ins t i l u t i o n a l arrangements.
I3espite this i n a u s p i c i o u s b e g i n n i n g the
C A T T has been r e m a r k a b l y successful, at least
w h e n its " b i r t h defects" are r e c o g n i z e d Partly
thanks to some i n g e n i o u s and pragmatic leadership in its early years, the C A P F began to
f i l l the gap left b y the I T O f a i l u r e in the
worlds e c o n o m i c s y s t e m — t h e Bretton W o o d s
System Various small and often tentative
steps were taken to o v e r c o m e some of the
" b i r t h defects," and as decades w e n t by the
CAT T c h a l k e d up a n u m b e r of a c c o m p l i s h
m e n t s — s p o n s o r i n g t a r i f f r e d u c t i o n rounds
t h a i were largely successful, d e v e l o p i n g defacto i n s t i t u t i o n s that p r o v i d e d a f o r u m and
m e c h a n i s m for nations to discuss and n e g o t i ate on trade p r o b l e m s a n d , w i t h some ups and
downs, d e v e l o p i n g a remarkable dispute
settlement m e c h a n i s m w h i c h began to play
an i m p o r t a n t role in e n h a n c i n g the effectiveness and c r e d i b i l i t y of t h e trade rules c o n tained in the C A T T a g r e e m e n t , and later in
ancillary agreements developed by C A T T
c o n t r a c t i n g parties f o r f u r t h e r c o o p e r a t i o n
c o n c e r n i n g trade matters.
T h e success was s u f f i c i e n t t h a t in later
years t a r i f f s b e c a m e less i m p o r t a n t than a
plethora of n o n - t a r i f f barriers, many addressed
( f o r the first t i m e ) in t h e seventh r o u n d of
trade n e g o t i a t i o n s c a l l e d the " T o k y o R o u n d "
( 1 9 7 3 - 1 9 7 9 ) . In a d d i t i o n the dispute settlement p r o c e d u r e s , a l t h o u g h seriously flawed
in the G A T T , nevertheless a t t r a c t e d the att e n t i o n of business interests w h i c h saw the
advantages t h e y c o n t r i b u t e d to "rule orientat i o n " of the system a n d its a t t e n d a n t s t a b i l i t y
and p r e d i c t a b i l i t y . T h u s advocates of international disciplines for i n t e l l e c t u a l p r o p e r t y prot e c t i o n , and for measures a f f e c t i n g investment,
for e x a m p l e , became v e r y interested in the
C A T T as a l o c a t i o n f o r d e v e l o p i n g those
needed d i s c i p l i n e s . O t h e r agreements, such
as free trade agreements also f o l l o w e d some
of the p r i n c i p l e s and c h a r a c t e r i s t i c s of the
G A T T procedures
As decades passed, however, there was reco g n i t i o n that the G A T T system ( n o w a c o m
plex w e b of o v e r 200 treaty instruments plus
m a n y d e c i s i o n s , d i s p u t e panel reports, and
o t h e r measures that i n f l u e n c e d trade measures
taken by n a t i o n a l a u t h o r i t i e s ) was being increasingly c h a l l e n g e d by the c h a n g i n g con
d i t i o n s of i n t e r n a t i o n a l e c o n o m i c activity, in
e l u d i n g the greater " i n t e r d e p e n d e n c e " ot na
220
t i o n a l e c o n o m i e s , and the increasing (level
o p m e n t of trade in services C o n c e r n develo p e d that the C A P I was too handicapped to
play the needed role of c o m p l e m e n t i n g the
B r e t t o n W o o d s system as the " t h i r d leg "
W h a t are some of those defects or problems? The f o l l o w i n g can be mentioned, among
others
• C A T T a p p l i c a t i o n is controversial, flawed,
and s t i l l " p r o v i s i o n a l " a l t h o u g h the G A T T
rules d o a p p l y as b i n d i n g i n t e r n a t i o n a l
treaty o b l i g a t i o n s . G r a n d f a t h e r rights still
exist, even t h o u g h they were o r i g i n a l l y intended to be temporary A number of other
i n s t i t u t i o n a l problems stem f r o m this basic t r e a t y structure i n c l u d i n g the p r o b l e m
of a m e n d m e n t s , the relationship to domestic laws, the dispute settlement procedure,
questions of m e m b e r s h i p , and problems of
rule m a k i n g and power of the c o n t r a c t i n g
parties.
• T h e a m e n d i n g provisions o l the G A T T are
such t h a t it is n o w considered rarely possible t o a m e n d the C A T T T h e delay req u i r e d b y the treaty acceptance process,
the d i f f i c u l t y of o b t a i n i n g the r e q u i r e d
n u m b e r of acceptances, the shift in barg a i n i n g p o w e r i n v o l v e d under the amendi n g p r o c e d u r e i n the c o n t e x t of a large
m e m b e r s h i p , and the fact that even w h e n
an a m e n d m e n t is effective in G A T T it w i l l
not a p p l y t o c o u n t r i e s w h i c h do not acc e p t , are all reasons w h y the a m e n d i n g
p r o c e d u r e has fallen i n t o disuse T h i s has
caused a c e r t a i n r i g i d i t y and i n a b i l i t y to
d e v e l o p rules so as to a c c o m m o d a t e the
m a n y new d e v e l o p m e n t s in i n t e r n a t i o n a l
trade and o t h e r e c o n o m i c interdependence
subjects O n e result has been the develo p m e n t of an elaborate system of "side
treaties," w h i c h create some of their o w n
problems
• A key p r o b l e m is the relationship to C A T T
ol these many side agreements, in most
cases s t a n d - a l o n e treaties w h i c h are i n t i
m a t e l y l i n k e d to the C A T T treaty struc
ture itself. It is unclear in some c i r c u m s t a n c e s w h a t t h i s r e l a t i o n s h i p is, a n d
w h e t h e r an o b l i g a t i o n c o n t a i n e d in the
side agreement w i l l prevail over that of the
G A T T o r vice versa. In any event, since
the side agreements t e n d to have a series
of separate procedures l o i various matters
�iiK-Tuilmg i l i s p u l f s c - u l c m c n l , t l i c r c is a
LCitam i n c l l u j c n c y in the potential "forum
s h o p p i n g " SuTe agreements b i i u l only gove r n m e n t s w h i c h accepted t h e m , ami the
o p p o r t u n i t y to pick and choose has led to
" G A T T a la carte."
• In many G A I T m e m b e r c o u n t r i e s , the rel a t i o n s h i p of the G A T T treaty system to
d o m e s t i c law is very murky. I his may exist in any e v e n t , regardless of the basic
treaty s t r u c t u r e , as national legal systems
d i f f e r so w i d e l y . Nevertheless, some attent i o n c o u l d be given to the p o s s i b i l i t y of
certain i n t e r n a t i o n a l treaty o b l i g a t i o n s
w i t h respect to h o w the trade and econ o m i c rules s h o u l d be i m p l e m e n t e d dom e s t i c a l l y M o r e a t t e n t i o n has been given
l o this q u e s t i o n in recent years, sometimes
under the r u b r i c " t r a n s p a r e n c y " It s h o u l d
be n o t e d that the G A T T agreement itself
has several clauses ( A r t i c l e s V I I I and IX,)
that are related to transparency
• T h e r e are a n u m b e r of t r o u b l e s o m e p r o b
lems w i t h respect to m e m b e r s h i p or " c o n t r a c t i n g party status," in the G A T T system
T h e r e are various ways b y w h i c h a n a t i o n
becomes a " m e m b e r " of G A T T or one of
the side agreements. In some cases, m e m bership can be o b t a i n e d by a t e r r i t o r y that
does n o t have f u l l i n d e p e n d e n t i n t e r n a t i o n a l s o v e r e i g n t y . In c e r t a i n cases, f o r m e r
colonies can be sponsored for m e m b e r s h i p
and enter the G A T T w i t h very l i t t l e substantive c o m m i t m e n t , reducing the "terrain
of r e c i p r o c i t y , " and l e a d i n g to c r i t i c i s m s
of unfairness. T h e G A T T has an "opt o u t "
clause ( A r t i c l e X X X V ) by w h i c h i n d i v i d u a l
G A T T c o n t r a c t i n g parties can o p t out of a
G A T T r e l a t i o n s h i p w i t h o t h e r parties, at
one t i m e o n l y ( w h e n one of t h e m o r i g i nally enters G A T T ) Nevertheless, there
are a n u m b e r of instances w h e r e there is
an e f f e c t i v e " o p t o u t " at a later t i m e , w i t h
m u r k y legal results A r t i c l e X X I , w i t h an
e x c e p t i o n for " n a t i o n a l security" purposes,
is related to this issue
• T h e p o w e r of the coMlrrtct/M(/ parties del ined
in the G A T T a g r e e m e n t , is very a m b i g u ous. I n d e e d , it is so b r o a d that it c o u l d be
the subject of abuse (but it has not so been
abused) T h e r e are a n u m b e r of unsettled
and d i s q u i e t i n g issues, such as the j i o w e r
ol the c o n t r a c t i n g parties to i n t e r p r e t the
G A T T a g r e e m e n t , and the r e l a t i o n s h i p ot
actions ol the e o n t i a c i i n g p a n i c s to some
ol the side agreements. I u r t h e r m o r e , the
d e c i s i o n m a k i n g process leaves much to be
d e s i r e d I h e s o - c a l l e d " c o n s e n s u s approach" has some inherent detects, but has
e v o l v e d to ameliorate some of the p r o b lems of a o n e - n a t i o n o n e - v o t e structure,
c o u p l e d w i t h the a m b i g u i t y and terseness
of the G A T T text. T he G A T T c o u n c i l has
been created out ot w h o l e c l o t h by resol u t i o n of the ccmtriKlimj partia, and has no
treaty status
• T h e dispute settlement processes of C A T T
have been one of the more i n t r i g u i n g ins t i t u t i o n a l e v o l u t i o n s of that i n s t i t u t i o n .
T h e treaty language is very sparse i n d e e d ,
but many decades of practice have resulted
in a considerable a m o u n t of exegesis, and
the e l a b o r a t i o n of m u c h of this in a T o k y o
R o u n d " u n d e r s t a n d i n g , " as w e l l as f u r t h e r
efforts to i m p r o v e the procedures d u r i n g
the c u r r e n t U r t t g u a y R o u n d
Dispute
settlement procedures are i n t i m a t e l y c o n nected w i t h p r o b l e m s of "effectiveness."
T h e r e is considerable w o r r y about whether
the G A T T p r o c e d u r e s can stand up to
some of the pressures that are being i m posed u p o n t h e m c u r r e n t l y
• Finally, t h e r e has been a l o n g festering
p r o b l e m w i t h respect to the r e l a t i o n s h i p
of G A T T to the o t h e r B r e t t o n W o o d s i n s t i t u t i o n s , p a r t i c u l a r l y the I n t e r n a t i o n a l
M o n e t a r y Fund and the W o r l d Bank. T h i s
is one of the items e x p l i c i t l y flagged for
n e g o t i a t i o n in the U r u g u a y R o u n d , and
c e r t a i n l y m e r i t s m o r e a t t e n t i o n , since the
m o n e t a r y questions are really o n l y "the
o t h e r side of the c o i n " of trade questions.
T o a c e r t a i n extent each of these problems
c o u l d be o v e r c o m e by pragmatic and specific
a c c o m m o d a t i o n s , but taken t o g e t h e r t h e y
have the c a p a c i t y to weaken the i n s t i t u t i o n
iust as its need becomes greater in the l i g h t
ol general i n t e r n a t i o n a l e c o n o m i c interdependence In particular, the G A T T as an " i n s t i t u t i o n " ( w h i c h it has now become) is c o n f u s i n g
and i l l - u n d e r s t o o d , not o n l y by the general
p u b l i c , b u t e v e n by g o v e r n m e n t o f f i c i a l s
c h a r g e d w i t h a c t i n g in r e l a t i o n to the G A T T
M i s s t a t e m e n t s a b o u t the G A T T have been
made, and the c o m p l e x i t y and detail ( i n c l u d ing many h i s t o r i c a l e x c e p t i o n s such as the
g r a n d f a t h e r r i g h t s ) have added to the p r o b
C-221
�Brcllon Wood'.: Looking l o tlie l ulurt:
|cm Some difficulties are "administrative."
sudi .is lack of clarity of the secretSYiat emplovm. ni and retirement contracts, or worries aboui ibe lack of the traditional privileges
and immunities which attend most imernaiional organizations.
Ai the Uruguay Round launching meeiing
at Puma d d lisle in September 1986, one of
the negotiating objectives expressed was attention to the "Future of the G A I T System,"
,,, T O G S " for short. A negotiating group was
MM up-to pursue this objective, and proposed
some important i n n o v a t i o n s such as the
"TPRM -Trade Policy Review Mechanism" it
also gave some attention to the problem ol
"coherence" in inlernational economic policy,
which olten meant the need to coordinate
trade policy and monetary policy.
Later in the Uruguay Round, however, several nations put forward a proposal to create
a new international organization with a more
solid legal basis. The government of Canada
put forth a proposal for a W T O in May of
1990, and a bit later the European Economic
Community proposed a similar organization
named " M T O - M u l t i l a t e r a l Trade Organization." Only part of the reasons for these ideas
stemmed from the G A T T defects and problems however Another very important motivation was the perceived need to extend institutional support to the important "new issues" of the Uruguay Round negotiations,
namely trade in services and disciplines for
trade related intellectual property protection
The WTO and the Uruguay
Round Results
A Draft Charter Emerges
In December 1991, the Uruguay Round negotiators, led by the G A I T Director General,
Arthur Dunkle, prepared and released a draft
text of treaty clauses which covered the entire Uruguay Round negotiation results up to
that point, with indications of work yet to do
This was a formidable and very important
project with many implications. Included in
this draft was, for the first time, a tentative
draft of a new charter for an organization—
an M T O or Multilateral Trade Organization—
which could come into force with the results
of the Uruguay Round and provide an msntutional framework for those results. In addi
tion, and„not incidentally, the Dunkle-text
structure "with the p W i b l e . M T O charter, pro-
••• . 222
vided a legal technique to avoid some of the
problems of trying to amend the GATT For
example, the structure ol the text calls for
nations to accept an entirdy new treaty system and organization, allowing them to withdraw from the "old" GATT of I9't7 and accept the "new" G A T T of I99'f As stu b, technically there would be no need to "amend" the
old GATT, and therefore no need to fulfill
amending procedures requiring unanimity or
two thirds acceptances. It is iccogmzed that
a new treaty would need all of the important
trading countries of the old ( .AT T, including
a significant number ol developing countries,
but the risk of "holdouts" or "free-nders" would
be substantially reduced.
The basic concept of the new organization differs considerably from lhat of the ill
fated I T O charter of Havana The proposed
M T O (later W T O ) was by comparison a sort
of "mini-charter," containing only institutional
measures and not substantive obligations. On
the other hand a vast array of substantive obligations—old as well as new—would be contained in a series of annexes appended to the
charter.
In addition to partly correcting some of
the C A T T defects, and extending an institutional structure to new issues, the text provided a convenient framework for reinforcing
the "single package" idea of the negotiations,
which requires, w i t h only a few exceptions,
nations which accepted the Uruguay Round
results to accept all of the treaty obligations
of the existing and revised G A T T and ancillary agreements, the Services Agreement
(GATS-General Agreement on Trade in Services), and the TRIPS agreement (Trade Related Intellectual Property)
Furthermore the M T O draft would establish an institutional framework for supervising a unified dispute settlement procedure,
and the newly developing T P R M (Trade
Policy Review Mechanism)
Although flawed in some respects, this
draft charter provided a significant framework
for further attention by negotiators and their
lawyers, and engaged considerable work on
certain key issues such as voting and amending procedures. Gradually it seemed that vir
tually all Contracting Parties to CATT sup
ported the new organization, except the
United States. Finally, at the Geneva negotiations of December 1993, the United States
'. agreed (partly at European insistencc) t . O i a ^
;
�; r. • . / M I : ! i l ;
ccpt t h f new DiganiZiilion, alter achieving
changes it fell were needed in the dralt charter. Ironically the United Stales required the
name of the new organization to be " W T O World Trade Organization," arguably modestly more ambitious than the title " M T O . "
Provisions of the New Charter
It is possible here only to briefly outline some
of the characteristics of the W T O draft charter To begin with, following a general statement of objectives for the organization (winch
added some dimensions beyond those expressed in the original CATT, such as sensitivity to environmental considerations), the
charter firmly and clearly expresses the agreement of nations that the organization shall
have legal status The charter also expresses
the typical language of international organization charters calling for necessary "privileges and immunities" needed to carry out the
functions allocated to the organization A
number of other typical organizational clauses
are found in the charter such as measures concerning a secretariat, director general, budget making, and some sub-bodies. Always the
GATT had to struggle with these issues as a
matter of implication, without express treaty
language to provide guidance (Nevertheless
the C A T T was remarkably successful in evolving through a series of case-by-case decisions
that became practice that guided it.) In addition:
• Membership is provided for countries that
are already GATT Contracting Parties, and
the GATT concept of "independent customs
territory" rather than full "sovereignty" as the
necessary attribute is continued.
• A Ministerial Conference is set up as the
overall highest authority of the organization, to meet "not less than once every two
vears." In this respect, the negotiators were
somewhat influenced by the structure of
the IMP and the World liank
• I he W T O establishes a rather elaborate system of "councils," starting wilh a general
council, and continuing with a council lor
each of the three major sub-divisions of the
substantive obligations (goods, services, and
intellectual property). Various clauses discuss
the competence of the councils as related to
an overall ministerial conference and provides some guidance on procedures Never
theless, it is clear that further interpretations,
probably from developing practice will be
important
The substantive treaty obligations are included in a series of annexes, as mentioned
above These annexes arc very extensive,
and have a number of legal drafting problems that probably will not be corrected
before the text comes into force. Partly
this is because of some of the anomalies in
the structure of the old CATT, partly it is
a result of some of the developments in
different negotiating groups
Considerable attention was paid by the
negotiators to the question of decision
making, in a number of different contexts:
amending, waivers, interpretations, etc. In
many cases these issues became quite complex, because of the diverse nature of the
different treaty obligations, as well as the
supervision of the dispute settlement procedure and TPRM—Trade Policy Review
Mechanism. Nevertheless, the text is quite
ingenious in both trying to maintain protection against misuse of majority power,
and providing somewhat more flexibility
to develop new initiatives than was the
case of the prior GATT system structure.
• The old problem of GATT being applied
"provisionally," and the attending so-called
"grandfather rights" is finally overcome.
Some of the grandfather rights are converted
into other kinds of measures, but basically
the new structure will be "definitively applied" and no longer "provisional," and no
grandfather rights as such will prevail.
• Likewise, there was considerable discussion about a peculiar feature of the GATT
structure known as the "Opt Out Clause"
(old A r t i c l e 35). The question arose
whether, and to what extent, countries
could opt out under similar rules of the
CATT, and if so whethei they could opt
out of just parts of the agreement The resulting structure clarifies these problems
somewhat, still preserving some small opportunities at the time a customs territory
enters the organization, to opt out, but
requiring virtual complete opt otit, inhibiting "pick and choose" actions
• A very important part ol the new structure is the new understanding on "dispute
settlement." It will establish a "unified dispute settlement procedure,' instead of a
C-223
�Brelton Woods: Looking to ihe I'-uture
fragmented one (as occurred,before with
different procedures for some of the different Tokyo Round Codes.) It will also
have more explicit rules for supervising
and amending these procedures
• Finally, the TPRM (Trade Policy Review
Mechanism) is firmly established as part of
. the task of the new organization, and offers
some important general possibilities of developing discussion and "policy coherence."
Necessary Evolution
As is always the case with elaborate negotiations of many nations, a number of issues arceither left open, or relegated to fairly ambiguous clauses. Early practices will be important
and will hopefully fill in some of these gaps
The WTO as a Bretton Woods
Partner
16
It has been observed by others that the combination of events and institutional developments of the last few years, with the NAFTA
in N o r t h America, the EC evolution towards
deepening and broadening integration, the
extraordinarily elaborate Uruguay Round results, as well as developments in China and
East Europe, probably amount to the most
profound change in international economic
relations, institutions and structures, since the
origin of the Bretton Woods System itself in
the immediate post war period. Inevitably of
course, this raises the question of the role of
the new W T O as part of the "new Bretton
Woods System," as a partner to the International Monetary Fund (IMF), and the World
Bank (IBRD).
First, it is significant that, for the first time,
we will have an explicit treaty-charter agreemenl establishing an international orgamza
tion for trade, which can take its place beside
the previously mentioned Bretton Woods or
gamzations. This may seem a mere formalism
but i l can have importance in orienting pub
he and official perceptions and understand
ings It could have a healthy influence in in
creasing the prestige of the trade organiza
tion and treaty system—clearly one ol the
desired results No longer will government
officials or the press have to rim through th
slalom of legal obstacles provided under th
previous system, with its "provisional appli
cation," and its convoluted multiple dispute
settlement procedures, as well as the difficult
web of treaties that applied I he new struc
ture carries forward much complexity, but for
general understanding, the new W T O Charter should be considerably better. Furthermore, there are at least some indications in
this structure of the need for the organization to pay attention to us "public image." In
order for an organization which has such a
potentially profound impact on economic affairs (touching many lives and national aspirations) to succeed, it must give some attention to how it is understood by public constituencies in different cultures and economic
systems The W T O is clearly a plus, despite
its still considerable complexity
In progressing from the point of view just
expressed, an important defect of the previous system (a Bretton Woods without an international trade organization) was perceived
by many to be the lack of "coherence " This
meant the lack of appropriate coordination
and discussion between, on the one hand,
national government officials and international organizational officials who concentrated on monetary and lending questions, and
those involved in the somewhat "messier"
problems of trade in goods (involving many
different interest groups and political/economic forces) on the other hand. One of the
purposes of a new W T O is clearly to help
provide this coherence, partly by establishing a higher profile, understandability, and
prestige for the W T O and the organization
officials and national government officials accredited to i t . If managed appropriately,
there should be a considerably greater interchange among the three Bretton Woods institutions, possibly with certain joint committees, o r a l least more attention to some issues
such as how trade matters affect balance of
payments or other monetary questions, and
vice-versa, how monetary affairs, including
exchange rale changes, can have great effects
on trade policy
Indeed, in recent years and even recent
weeks (as of this writing—March I 994), there
have been a number of circumstances which
poignantly demonstrated the importance of
the connection between monetary and trade
policy The bilateral trade tensions between
the United States and Japan and the ensuing
dramatic exchange rate shifts are one such example. The desire and advantage of some of
the newly privatizing, or "marketizing" economies (Russia and othei Republics, China, etc )
�1
' '''M
1
.•/III! Oiln.-i i ; : .
also poignanlly dcnionsirate this link, as
economists and policy makers stress the need
for floating exchange rates in order (or traderelations to be successful.
Indeed, even in the CATT there was recognition of the monetary-trade link in several
articles Countries who were C A T T Contracting Parties but not Members of the IMF had
an obligation under C A T T to enter into somesort of monetary framework agreement. Likewise, the CATT had provisions for trade measures
linked to balance of payment difficulties
Although the Uruguay Round results arcextensive and very good in many respects,
there clearly are a number of issties left over
for future discourse, and some of these will
have important implications for the work of
the World Bank and possibly the Fund. For
example, anti-dumping and subsidy rules have
often been contentious. Apparently, there
have been occasional recommendations to developing countries to use these rules in a way
that would seem less than optimal by trade
specialists. Hopefully the new institutional structure will create an environment of better coordination and mutual understanding between trade
specialists and monetary specialists.
Likewise agriculture and food policy have
a long way to go, and so also do policies relating to commodities and commodity agreements. A l l of these can be substantially affected by monetary movements, particularly
for some smaller countries.
A very important feature of the new institutional structure is the new dispute settlement
procedures. As indicated above, these are one
of the interesting accomplishments of the
GATT's pragmatic case-by-case practice of
four decades. The result is an important attribute of an international treaty "regime," and
looked upon as an essential component of effectively implementing treaty obligations and
thus producing the degree of credibility tor
those obligations that makes them operate
successfully in international economic relations. At some point, it seems that it is almost
inevitable that some monetary issues will find
their way into some disputes brought into
these procedures
One interesting and new institutional feature of the trading system is the TPRM (Trade
Policy Review Mechanism) Modelled somewhat after the O F C D economic evaluations, the
TPRM offers a context for reviewing the trade
policy of particular countries on a rotation basis
(with the large trading countries most often reviewed). The thrust of the review is not so tied
to specific treaty obligations as would be the
case if one relied only on the dispute settlement
mechanism. Instead, the TPRM is designed to
range broadly into policies which may be having damaging effects on trading partners and
neighbors, even though they are not currently
inconsistent with any treaty obligations This
process could, if wisely used, become an important technique for airing new problems that
emerge in international economic relations, and
lay the foundations for further negotiation of
adequate rules or other policy responses.
W i t h an official and legal institutional
structure in place, the W T O now can be more
of a "full partner" w i t h the other Bretton
Woods institutions. One might see individual
key staff members sent as "visiting staff" to
other institutions for periods of time that
would assist liaison and cross fertilization of
ideas. Furthermore, one could easily envisage
the development of some kind of committee
or commission, or working party that would
have representation from all three institutions
and meet regularly at the staff level to air certain policies which risk divergences. Possibly
there could even develop a system of joint
meetings at the ministerial level.
As a trade specialist, this author does not
pretend to know all the possibilities that the
new trade structure may bring to the broader
context of the Bretton Woods system and the
links between monetary and trade policy. It is
hoped, however, the exposition in this short
paper will add a measure ol understanding and
hopefully trigger further ideas for a more adequate participation in the Bretton Woods
system of trade policy and trade institutions.
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�
Dublin Core
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Title
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Michael Waldman
Description
An account of the resource
<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
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Michael Waldman
Office of Speechwriting
Date
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1993-1999
Identifier
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2006-0469-F
Extent
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Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Text
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Original Format
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paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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WTO [World Trade Organization]: Basic History of GATT [General Agreement on Trade and Tariffs]/WTO [World Trade Organization]
Creator
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Office of Speechwriting
Michael Waldman
Is Part Of
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Box 30
<a href="http://clinton.presidentiallibraries.us/items/show/36404"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
Identifier
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2006-0469-F Segment 2
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Preservation-Reproduction-Reference
Date Created
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6/3/2015
Source
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7763296
42-t-7763296-20060469F-Seg2-030-007-2015