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5February 1998
GOLDEN JUBILEE OFTHE MULTILATERAL TRADING SYSTEM
Thisyear,1998,marksthefiftiethanniversaryoftheoperationofthemultilateraltradingsystem,
formerly known astheGATT which waslatersuperseded bytheWorld Trade Organization (WTO).
Below isashort statement from Renato Ruggiero, Director-General oftheWTO, regarding this
anniversary:
"This yearistheGolden Jubilee ofthemultilateral trading system. Thecreation ofthissystem
surely ranks among thegreatest economic achievements ofthepost-World WarIIera.Forawar-torn
international community, thesystem gavesubstance toashared dream ofafairandopenworld trading
system. More thanthat,ithasleddirectly tothebreaking-down ofbarriers notjustbetween countries
butbetween peoples. Attheheart ofthesystem areitsrules-based structure andtheprinciple ofnon-
discrimination.
"The multilateral trading system continues togrow inscope andcredibility. Currently, there
are132member governments, withanadditional 30negotiating theirterms ofmembership. Itwould
bedifficult tooverstate thecontribution theWTO makes togrowth anddevelopment onaworld scale.
"On20May1998, wewillholdahighprofile celebration inGeneva tomarktheGolden Jubilee
andhighlight forthecitizens oftheworld thecontribution thissystem hasmade toglobal peace and
prosperity."
Note toEditors:
Attached isabriefchronology ofsome ofthemore significant events andachievements inthelifeof
themultilateral trading system sofar.
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GATT/WTO CHRONOLOGY
1947 Thebirth ofGATT. On30October 1947, theGeneral Agreement onTariffs andTrade
(GATT) wassigned by23nations -twelve developed andeleven developing economies -at
thePalais desNations inGeneva. TheAgreement contained tariffconcessions agreed toduring
thefirstmultilateral tradenegotiations andasetofrulesdesigned toprevent these concessions
from being frustrated byrestrictive trade measures.
Thegenesis ofGATT. In1946, thenewly-created Economic andSocial Council oftheUnited
Nations called aconference toconsider thecreation oftheInternational Trade Organization
(ITO) which wasenvisaged asthefinallegofatriadofpost-War economic agencies (theother
twoweretheInternational Monetary Fund andtheInternational Bank forReconstruction and
Development -later theWorld Bank). Apreparatory committee wasestablished todraftthe
ITOcharter.
During 1946-1947, thecommittee worked onthedraftcharter. However, independent ofthis
officialtaskundertheUNmandate,thecommitteemembersconductedtariff-cuttingnegotiations
among themselves inadvance oftheITO. These negotiations resulted inabout 45,000 tariff
concessions affecting some US$10billion ofworld trade.
Thecommittee members alsoagreed toprotect thevalue ofthetariff concessions byearly
acceptance ofsome ofthetrade rules ofthedraftITOcharter. Thus, tariff concessions and
trade rules together became known astheGeneral Agreement onTariffs andTrade (GATT)
which wassigned on30October 1947 by23countries asaninterim measure.
InNovember 1947, delegations from56countries metinHavana, Cuba, toconsider theITO
draftasawhole. After longanddifficult negotiations, some 53countries signed theFinal
Actauthenticating thetextoftheHavana Charter inMarch 1948. There wasnocommitment,
however, fromgovernments toratification and,intheend,theITOwasstillborn, leaving GATT
astheonlyinternational instrument governing theconduct ofworld trade.
1948 Entry intoforce. On1January 1948, GATT entered intoforce. The23founding members
were:Australia,Belgium,Brazil,Burma,Canada,Ceylon,Chile,China,Cuba,Czechoslovakia,
France, India, Lebanon, Luxembourg, Netherlands, NewZealand, Norway, Pakistan, Southern
Rhodesia, Syria, South Africa, United Kingdom andtheUnited States.
Thefirstrealbusiness oftheGATT wasconducted bytheFirstSession ofContracting Parties
which began on28February 1948 andended on20March 1948 inHavana, Cuba. The
secretariat oftheInterim Commission fortheITO, which served astheadhocsecretariat of
GATT, moved from Lake Placid, NewYork, toGeneva in1948.
1949 Second Round atAnnecy. During thesecond Round oftrade negotiations, heldfromApril
toAugust atAnnecy, France, thecontracting parties exchanged some 5,000 tariffconcessions.
AttheirthirdSession, theyalsodealtwiththeaccession oftenmore countries.
1950 Third Round atTorquay. From September 1950 toApril 1951, thecontracting parties
exchanged some 8,700 tariffconcessions intheEnglish town, yielding tariffreductions ofabout
25percentinrelation tothe1948 level. Four more countries acceded toGATT. During
thefifthSession oftheContracting Parties, theUnited States indicated thattheITOCharter
would notbere-submitted totheUSCongress; this,ineffect, meant thatITOwould notcome
intooperation.
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1956 Fourth Round atGeneva. Thefourth Round wascompleted inMayandproduced some $2.5
billion worth oftariff reductions. Atthebeginning oftheyear, theGATT commercial policy
course forofficials ofdeveloping countries wasinaugurated.
1960 TheDillon Round. ThefifthRound opened inSeptember andwasdivided intotwophases:
thefirstwasconcerned withnegotiations withEECmember states forthecreation ofasingle
schedule ofconcessions fortheCommunity based onitsCommon External Tariff; andthe
second wasafurther general round oftariff negotiations. Named inhonour ofUSUnder-
Secretary ofState Douglas Dillon whoproposed thenegotiations, theRound wasconcluded
inJuly1962 andresulted inabout 4,400 tariff concessions covering $4.9billion oftrade.
1961 TheShort-TermArrangementcoveringcottontextileswasagreedasanexceptiontotheGATT
rules. Thearrangement permitted thenegotiation ofquota restrictions affecting theexports
ofcotton-producing countries. In1962the"Short-term" Arrangement became the"Long-term"
Arrangement, lasting until1974 when theMultifibre Arrangement entered intoforce.
1964 TheKennedy Round. Meeting atMinisterial level, aTrade Negotiations Committee formally
opened theKennedy Round inMay. InJune1967, theRound 'sFinal Actwassigned bysome
50participating countries which together accounted for75percentofworld trade. Forthe
firsttime, negotiations departed from theproduct-by-product approach usedintheprevious
Rounds toanacross-the-board orlinear method ofcutting tariffs forindustrial goods. The
working hypothesis ofa50percenttarget cutintariff levels wasachieved inmany areas.
Concessions covered anestimated totalvalue oftradeofabout $40billion. Separate agreements
were reached ongrains, chemical products andaCode onAnti-Dumping.
1965 ANewChapter. Theearly 1960s marked theaccession totheGeneral Agreement ofmany
newly-independent developing countries. InFebruary, theContracting Parties, meeting in
aspecial session, adopted thetextofPartIVonTrade andDevelopment. Theadditional chapter
totheGATT required developed countries toaccord highpriority tothereduction oftrade
barriers toproducts ofdeveloping countries. ACommittee onTrade andDevelopment was
established tooversee thefunctioning ofthenewGATT provisions. Inthepreceding year,
GATT hadestablished theInternational Trade Centre (ITC) tohelpdeveloping countries in
trade promotion andidentification ofpotential markets. Since 1968, theITChasbeenjointly
operated byGATT (later theWTO) andtheUNConference onTrade andDevelopment
(UNCTAD).
1973 TheTokyo Round. Theseventh Round waslaunched byMinisters inSeptember attheJapanese
capital. Some 99countries participated innegotiating acomprehensive body ofagreements
covering bothtariff andnon-tariff matters. AttheendoftheRound inNovember 1979,
participants exchanged tariff reductions andbindings which covered more than$300 billion
oftrade. Asaresult ofthese cuts,theweighted average tariff onmanufactured goods inthe
world 'sninemajor industrial markets declined from 7.0to4.7percent. Agreements were
reached inthefollowing areas: subsidies andcountervailing measures, technical barriers to
trade, import licensing procedures, government procurement, customs valuation, arevised
anti-dumping code, trade inbovine meat, trade indairy products andtrade incivilaircraft.
Thefirstconcrete result oftheRound wasthereduction ofimport duties andothertradebarriers
byindustrial countries ontropical products exported bydeveloping countries.
1974 On1January 1974, theArrangement Regarding International Trade inTextiles, otherwise
known astheMultifibre Arrangement (MFA) ,entered intoforce. Itsuperseded the
arrangements thathadbeengoverning trade incotton textiles since 1961. TheMFA sought
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topromote theexpansion andprogressive liberalization oftrade intextile products while at
thesame timeavoiding disruptive effects inindividual markets andlinesofproduction. The
MFA wasextended in1978, 1982, 1986, 1991 and1992.
1986 TheUruguay Round. GATT Trade Ministers meeting atPunta delEste, Uruguay, launched
theeighth Round oftrade negotiations on20September. Envisaged tolastfouryears,
negotiations wereheldinGeneva, Switzerland, andcontinued forsome seven andahalfyears
covering themost wide-ranging andambitious agenda ofanyRound sofar.
1993 Successful Conclusion oftheUruguay Round negotiations on15December 1993inGeneva,
Switzerland .
1994 TheFinal ActoftheUruguay Round signed byMinisters on15April 1994inMarrakesh ,
Morocco.Resultsincludedaveragetariffcutsof40%onindustrialproducts;anaverageincrease
inthepercentage oftariff bindings from 21%to73%(fordeveloping countries), from 78%
to99% (fordeveloped countries), andfrom 73% to98% (fortransition economies); a
comprehensive programme ofagricultural reform, including liberalization commitments on
tariffs, domestic support andexport subsidies, andthereplacement ofallquantitative restrictions
andother non-tariff measures bytariffs; aphase-out ofexport restrictions andenhanced market
access fortextiles andclothing; strengthened agreements onsafeguards, technical barriers,
customs valuation, import licensing, state-trading, subsidies, andanti-dumping and
countervailing. Theresults alsoproduced newagreements onsuchareas astrade inservices,
intellectual property rights, sanitary andphytosanitary measures, andtrade-related investment
measures. TheUruguay Round results alsotransformed theprovisional multilateral trading
system which hadexisted under theGATT intothepermanent World Trade Organization with
asignificantly strengthened legalmechanism forresolving trade disputes multilaterally.
1995 Entry intoforce oftheWorld Trade Organization on1January 1995.
On31May1995, WTO General Council approved theHeadquarters Agreement withthe
Swiss Confederation, including thedecision tolocate theWTO inGeneva.
Financial services accord reached on28July1995, withgovernments agreeing tonegotiate
further liberalization attheendof1997.
1996 Basic telecommunications negotiations aresuspended inMay1996 inspiteofsubstantial
offers. Governments participating agreed topreserve theofferandtore-examine themduring
a30-day period beginning 15January 1997.
1996 Maritime transport services negotiations suspended inJuly1996. Members participating
inthenegotiations agreed tosuspend thenegotiations andtoresume them, onthebasis of
existing orimproved offers, atthetimeofthefurther round ofcomprehensive negotiations
ontrade inservices mandated tobegin intheyear2000.
First WTO Ministerial Conference heldinSingapore, 9-13December 1996. Among the
majorconclusionsoftheConferencewastheestablishmentofthreeworkinggroups,respectively,
ontrade andinvestment, trade andcompetition policy, andtransparency ingovernment
procurement, plusamandate toconduct astudy ontrade facilitation.
1997 Successful conclusion ofnegotiations onbasic telecommunications services on15February
1997. Sixty-nine governments agreed towide-ranging liberalization measures. Domestic and
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international revenue generated inthebasic telecommunications sector roughly amounts to
US$600 billion annually. Theagreement entered intoforce on5February 1998.
1997 On26March 1997, fortygovernments agreed tocutcustoms duties oninformation technology
products ,beginning on1July1997andwiththeaimofeliminating allduties ontheseproducts
by2000. International trade inthese products amounts tosome US$600 billion annually.
1997 Successful conclusion ofnegotiations onfinancial services on12December 1997. Seventy
governments reached amultilateral agreement toopentheirfinancial services sectors, covering
more than95percentoftrade inbanking, insurance, securities andfinancial information.
Theagreement willenter intoforce on1March 1999.
END