The Conclusion of the Uruguay Round and the Creation of the WTO

On December 15, 1993, the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT) concluded after seven years of complex discussions. This pivotal moment in international trade history led to the establishment of the World Trade Organization (WTO), which officially came into being on January 1, 1995.

Background

The Uruguay Round was the eighth round of multilateral trade negotiations conducted within the framework of GATT, which was established in 1947 to promote international trade by reducing tariffs and other trade barriers. The negotiations began in Punta del Este, Uruguay, in September 1986, with the aim of addressing a wide range of trade issues, including:

• Tariffs and Non-Tariff Barriers: Further reduction of tariffs and addressing non-tariff barriers to trade.
• Agriculture: For the first time, agriculture was included in the negotiations, focusing on reducing subsidies and protectionist measures.
• Services: Introduction of trade in services into the multilateral trading system.
• Intellectual Property: Establishing rules for the protection of intellectual property rights.
• Textiles and Clothing: Phasing out the Multi-Fibre Arrangement, which imposed quotas on textiles and clothing.

Key Events Leading to the Conclusion

The Uruguay Round was marked by intense negotiations and numerous challenges, including disagreements between developed and developing countries, particularly over agricultural subsidies and market access. The round faced several deadlocks, but significant breakthroughs occurred in the early 1990s, leading to the final agreement.

• The Blair House Accord (1992): A critical agreement between the United States and the European Community on agricultural issues, which helped resolve one of the major sticking points.
• The Dunkel Draft (1991): Named after GATT Director-General Arthur Dunkel, this draft text served as a basis for further negotiations and was instrumental in moving the talks forward.

The Final Agreement and Its Significance

The conclusion of the Uruguay Round resulted in the signing of the Marrakesh Agreement in April 1994, which established the WTO. The WTO replaced GATT as the primary international body governing trade, with a broader mandate and a more robust institutional framework.

Key Outcomes:

• Creation of the WTO: The WTO was established to oversee the implementation of the agreements reached during the Uruguay Round and to provide a forum for future trade negotiations.
• Comprehensive Trade Agreements: The round produced a series of agreements covering goods, services, and intellectual property, significantly expanding the scope of international trade rules.
• Dispute Settlement Mechanism: A new, more effective dispute resolution process was introduced, providing a legal and institutional framework for resolving trade disputes between member countries.

Broader Historical Significance

The conclusion of the Uruguay Round and the creation of the WTO marked a significant shift in the global trading system. It represented a move towards greater liberalization and integration of the world economy, with an emphasis on rules-based trade. The agreements reached during the round have had lasting impacts on global trade patterns and economic policies, influencing subsequent trade negotiations and shaping the modern international economic landscape.

In summary, the successful conclusion of the Uruguay Round on December 15, 1993, was a landmark achievement in international trade, laying the foundation for the WTO and setting the stage for a new era of global economic cooperation.