![]() Percentages of tariffs bound before and after the The multilateral trading system is an attempt by governments to make the business environment stable and predictable. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition Sometimes, promising not to raise a trade barrier can be as important as lowering one, because the promise gives businesses a clearer view of their future opportunities. Developing countries are usually given longer to fulfil their obligations. The WTO agreements allow countries to introduce changes gradually, through Opening markets can be beneficial, but it also requires adjustment. As a result of the negotiations, by theĬountries’ tariff rates on industrial goods had fallen steadily to less than 4%.īut by the 1980s, the negotiations had expanded to cover non-tariff barriers on goods, and to the new areas such as services and intellectual property. At first these focused on lowering tariffs (customs duties) on imported goods. A ninth round, under the Doha Development Agenda, is now underway. Since GATT’s creation in 1947-48 there have been eight rounds of trade negotiations. From time to time other issues such as red tape and exchange rate policies have also been discussed. The barriers concerned include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively. ![]() Lowering trade barriers is one of the most obvious means of encouraging trade. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax. National treatment only applies once a product, service or item of intellectual property has entered the market. The three main WTO agreements (Article 3 of GATT,Īrticle 17 of GATS and Article 3 of TRIPS),Īlthough once again the principle is handled slightly differently in Others the same treatment as one’s own nationals) is also found in all This principle of “national treatment” (giving The same should apply toįoreign and domestic services, and to foreign and local trademarks,Ĭopyrights and patents. The foreign goods have entered the market. National treatment: Treating foreigners and locals equally ImportedĪnd locally-produced goods should be treated equally - at least after In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners But the agreements only permit these exceptions under strict conditions. And in services, countries are allowed, in limited circumstances, to discriminate. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries. Or they can give developing countries special access to their markets. discriminating against goods from outside. For example, countries can set up a free trade agreement that applies only to goods traded within the group Together, those three agreementsĬover all three main areas of trade handled by the WTO. Principle is handled slightly differently. Property Rights (TRIPS) (Article 4), although in each agreement the (GATS) (Article 2) and the Agreement on Trade-Related Aspects of Intellectual MFN is also a priority in the General Agreement on Trade in Services Is so important that it is the first article of the GeneralĪgreement on Tariffs and Trade (GATT), which governs trade in goods. This principle is known as most-favoured-nation Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members. ![]() Most-favoured-nation (MFN): treating other people equally Under the WTO agreements, countries cannot normally discriminate between their trading partners.
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