Business Guide to the Uruguay Round

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Commonwealth Secretariat
01 Jan 1995
9781848595569 (PDF)

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This guide explains the rules of the Uruguay Round trade agreements and their implementation. It provides an overview of achievements of the Uruguay Round and the legal system established by it and explains the role of the World Trade Organization (WTO). It also presents the rules applicable to trade and examines their implications for trade liberalization, reviewing the main features of General Agreement on Trade in Services (GATS), the rules applicable to government procurement and state trading and it describes the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Published jointly by the International Trade Centre UNCTAD/WTO (ITC) and the Commonwealth Secretariat.
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  • Introduction

    The Uruguay Round of Multilateral Trade Negotiations was the most comprehensive and ambitious among the rounds of negotiations to be held under the auspices of the General Agreement on Tariffs and Trade (GATT).

  • Overview

    This overview introduces the legal system of the Uruguay Round and briefly describes the progress achieved in trade liberalization. It is divided into three sections.

  • World Trade Organization: forum for negotiations, dispute settlement and trade policy reviews

    One of the major achievements of the Uruguay Round is the strengthening of the institutional mechanism for enforcing the rules and the commitments assumed by countries through the establishment of the World Trade Organization (WTO).

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  • Expand / Collapse Hide / Show all Abstracts International Rules Governing Trade in Goods (Gatt 1994 And Its Associate Agreements)

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    • Four main rules of GATT

      The entire edifice of GATT's open and liberal multilateral trading system is built on four basic and simple rules.

    • Valuation of goods for customs purposes

      When customs duties are levied on an ad valorem basis (e.g. 10% of the value of imported goods), the actual incidence of duty depends on how Customs determines dutiable value. The Agreement on Customs Valuation requires Customs to determine the value on the basis of the price paid or payable by the importer in the transaction that is being valued. As a result of a Decision adopted in the Uruguay Round, Customs can reject transaction values when it has reasons to doubt the truth or accuracy of the value declared by importers or of the documents submitted by them.

    • Preshipment inspection

      The Agreement on Preshipment Inspection (PSI), negotiated in the Uruguay Round, provides developing countries with a means for dealing with the problem of under- or over-valuation of imported goods. Over 30 developing countries currently use the services of PSI companies for mandatory and independent verification in the exporting country of the prices of goods to be imported. The Agreement recognizes that the use of such services by developing countries may be necessary to prevent over- and under-invoicing and fraud.

    • Mandatory and voluntary product standards and sanitary and phytosanitary regulations

      Countries often require imported products to conform to the mandatory standards they have adopted for the protection of the health and safety of their people or for the preservation of their environment.

    • Import licensing procedures

      National import licensing procedures can adversely affect the flow of imports, particularly if these procedures are not transparent or if they unnecessarily delay the issue of licences. The Agreement on Import Licensing Procedures divides licences into two categories: automatic and non-automatic. Automatic licences should be issued within a maximum period of 10 days after the receipt of applications.

    • Rules applicable to exports

      GATT rules permit an export product to be relieved of all indirect taxes borne by it in the exporting country. The rules further allow countries to levy duties on exports if these are necessary to control exports or to achieve any other policy objective. As with imports, the rules prohibit export restrictions except in a few specified situations.

    • Rules governing subsidies on industrial products

      The GATT rules on subsidies stipulated in Article VI have been clarified and elaborated by the Agreement on Subsidies and Countervailing Measures (SCM) and the Agreement on Agriculture. Broadly speaking, the provisions of the Agreement on SCM apply to industrial products; those of the Agreement on Agriculture cover agricultural products.

    • Safeguard measures to restrict imports in emergency situations

      The Agreement on Safeguards authorizes importing countries to restrict imports for temporary periods if after investigations carried out by competent authorities, it is established that imports are taking place in such increased quantities (either absolute or in relation to domestic production) as to cause serious injury to the domestic industry that produces like or directly competitive products. It further provides that such measures, which could take the form of an increase in tariffs over bound rates or the imposition of quantitative restrictions, should normally be applied on an MFN basis to imports from all sources.

    • Safeguard actions for economic development purposes: special flexibility available to developing countries

      GATT rules provide special flexibility to developing countries to take safeguard measures to restrict imports, for temporary periods, in order to promote the development of new or infant industries. However, GATT lays down strict conditions for the invocation of these rules. Furthermore, safeguard measures can ordinarily be introduced only with WTO approval.

    • Response to unfair trade practices: rules on the use of countervailing and anti-dumping duties

      The GATT rules deal with two types of “unfair” trade practices which distort conditions of competition. First, the competition may be unfair if the exported goods benefit from subsidies. Second, the conditions of competition may be distorted if the exported goods are dumped in foreign markets.

    • Trade-related investment measures (TRIMs)

      Governments often impose conditions on foreign investors to encourage investment in accordance with certain national priorities. Conditions that can affect trade are known as trade-related investment measures or TRIMs.

    • Market access negotiations in the industrial and agricultural sectors (Agreements on Textiles and Clothing and on Agriculture)

      The preceding sections noted the main features of the strengthened legal system that has emerged from the Uruguay Round and how business persons can use their knowledge of the system to promote and develop their trade. The Round has also significantly improved market access, opening up additional and new opportunities for enterprises to sell abroad.

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  • Expand / Collapse Hide / Show all Abstracts International Rules Governing Trade in Services

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    • General Agreement on Trade in Services (GATS)

      Trade in services is growing and currently accounts for over 20% of all international trade. The General Agreement on Trade in Services (GATS), which has been negotiated in the Uruguay Round, applies the basic rules on trade in goods to trade in services. However, the rules have been suitably modified to take into account the differences between goods and services and the four modes in which international trade in services takes place.

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  • Expand / Collapse Hide / Show all Abstracts Government Procurement and State Trading

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    • Government procurement

      The rules of GATT specifically exempt purchases made by governments and the agencies controlled by them from the national treatment rule. Government agencies importing their requirements are also not obliged to extend MFN treatment to external suppliers of such products but only to give them fair and equitable treatment. These provisions permit purchasing agencies to buy their requirements, if they so wish, from domestic producers, even though products of comparable quality are offered for sale by foreign suppliers at lower prices.

    • State trading

      The GATT rules impose two main obligations on member countries in regard to State trading enterprises. First, they require these enterprises to conduct their business on the basis of commercial considerations. Second, in order to ensure transparency in the products imported and exported by such enterprises, they require member countries to notify the WTO secretariat of relevant information on their activities.

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  • Expand / Collapse Hide / Show all Abstracts Trade-Related Aspects of Intellectual Property Rights

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    • Agreement on trade-related aspects of intellectual property rights (TRIPS)

      The development of international trade can be adversely affected if the standards adopted by countries to protect intellectual property rights (IPRs) vary widely from country to country. Furthermore, the lax or ineffective enforcement of such rights can encourage trade in counterfeit and pirated goods, thereby damaging the legitimate commercial interests of manufacturers who hold or have acquired those rights. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the Uruguay Round, therefore lays down minimum standards for the protection of intellectual property rights as well as the procedures and remedies for their enforcement.

    • Appendices and Index
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