Why was it is necessary to replace GATT 1947 what are the main Essay

Why was it is necessary to replace GATT 1947 what are the main differences between GATT 1947 and the WTO Do you think that the - Essay Example .................................................................... 5 Interim Commission for the International Trade Organisation (1947-1994).......5 Review Session (1950s)....................................................................................... 6 European Economic Community (EEC) (1957).................................................. 6 Multifibre Arrangements (MFA-I through MFA-IV).......................................... 6 The Uruguay Round (1993-1994)....................................................................... 8 Multilateral Investment Agreement (MIA) (1996)............................................... 9 U.S. Corporate Average Fuel Economy .............................................................. 9 Dispute Settlement Body (DSB)............................................................................10 WTO’s Articles III and IV.....................................................................................10 Converting GATT 1947 to WTO Introduction The GATT was formed by states with a decisive idea of the co-operation that was required to promote economic development and modernisation. Even though the idea required an International Trade Organisation (ITO), the GATT was also able to achieve the goals of the original participants.1 It was, to a certain extent, efficient trade-liberalising machinery. The removal of QRs by developed nations in the aftermath of World War II was confined under its control, and excise taxes were cut down considerably.2 Barriers to trade, as of the 1970s, in the form of quotas and tariffs had weakened radically in value3, and governments were beset by the trade-misleading features of other economic strategies. The first five decades of GATT’s existence has a close resemblance to a product’s lifecycle. In the beginning market growth is sluggish, as the public become used to it. This is pursued by a phase of drastic improvement of market productivity and share as the pro duct launches.4 In the developed or third phase, growth stabilises but profits remain elevated. In the last stage profits start to drop. Core marketing theory informs us that by the third phase a company had to create a new product in order to thrive and survive.5 In the case of GATT, the stages of take off and maturity took place in the 1950s and the 1960s.6 This was the time when the greatest development was accomplished in terms of trade liberalisation. The demand for the products of GATT had stabilised by the 1970s.7 An effort was made to branch out into new markets by moving to non-tariff barriers (NTB), but this move was not quite productive. Indecisive strategies were implemented to deal with trade-related national regulations, but development was sluggish.8 The GATT-1947, with the formation of the World Trade Organisation (WTO), was converted into an organisation, and its expanse was considerably enlarged.9 Hence, the important issues to be addressed here are: (1) why was it necessary to replace GATT 1947? (2) What are the main differences between GATT 1947 and the WTO? (3) Is WTO an improvement, if so, why? In addressing these issues it is helpful to analyse briefly several of the major developments that took place in the world economy in the twentieth century. From GATT 1947 to WTO GATT was not officially a global organisation, specifically, an official unit in its own right. GATT is an inter-governmental agreement. Hence, GATT had contracting participants rather than member states.10 This transformed with the formation of an international organisation that governs multilateral contracts concerning trade in goods, trade-related aspects of intellectual property rights (TRIPs), and trade in services (GATS): the WTO.11 The different treaties governed by the WTO are between customs territories