Despite this success, by the 1980s several problems had surfaced with the GATT apparatus. Firstly, the dispute resolution mechanism of GATT was not functioning as effectively as had been hoped. Countries with longstanding disagreements were unable to reach any sort of resolution on a number of issues, ranging from government subsidies for exports to regulations regarding foreign direct investment. Secondly, a number of commodities, most importantly, agricultural products and textiles, were widely exempt from GATT disciplines. Thirdly, it was widely believed that certain forms of administered trade protection anti dumping duties, voluntary export restraints, and counter vailing duties were restricting trade and distorting trade patterns in many important sectors. Fourthly, trade in services was expanding rapidly and GATT had no rules regarding trade in services. Fifthly, countries that produced intellectual property movies, computer programs, patented pharmaceuticals were becoming increasingly frustrated by the lack of intellectual property protection in many developing nations. Lastly, the rules regarding trade related investment measures for example, domestic purchase requirements for plants built from foreign direct investment were hotly disputed. To address these problems, a new round of trade negotiations the Uruguay Round was launched in 1986. The goals of the Uruguay Round were far more ambitious than in previous rounds. It sought to introduce major reforms into how the world trading system would function. The treaty negotiated during the Uruguay Round,the GATT treaty of 1994, established the WTO the international institution to govern trade that was first visualized by the attendees of the Bretton Woods Conference 50 years earlier. The new GATT treaty provided for an entirely new and different dispute resolution mechanism to eliminate the gridlock of the old system. Furthermore, the Uruguay Round expanded GATT’s authority to new areas agreements regarding trade in textiles, agriculture, services, and intellectual property were major achievements. Finally, new sets of rules regarding administered protection came into effect with the creation of the WTO in 1995.
Despite this success, by the 1980s several problems had surfaced with the GATT apparatus. Firstly, the dispute resolution mechanism of GATT was not functioning as effectively as had been hoped. Countries with longstanding disagreements were unable to reach any sort of resolution on a number of issues, ranging from government subsidies for exports to regulations regarding foreign direct investment. Secondly, a number of commodities, most importantly, agricultural products and textiles, were widely exempt from GATT disciplines. Thirdly, it was widely believed that certain forms of administered trade protection anti dumping duties, voluntary export restraints, and counter vailing duties were restricting trade and distorting trade patterns in many important sectors. Fourthly, trade in services was expanding rapidly and GATT had no rules regarding trade in services. Fifthly, countries that produced intellectual property movies, computer programs, patented pharmaceuticals were becoming increasingly frustrated by the lack of intellectual property protection in many developing nations. Lastly, the rules regarding trade related investment measures for example, domestic purchase requirements for plants built from foreign direct investment were hotly disputed. To address these problems, a new round of trade negotiations the Uruguay Round was launched in 1986. The goals of the Uruguay Round were far more ambitious than in previous rounds. It sought to introduce major reforms into how the world trading system would function. The treaty negotiated during the Uruguay Round,the GATT treaty of 1994, established the WTO the international institution to govern trade that was first visualized by the attendees of the Bretton Woods Conference 50 years earlier. The new GATT treaty provided for an entirely new and different dispute resolution mechanism to eliminate the gridlock of the old system. Furthermore, the Uruguay Round expanded GATT’s authority to new areas agreements regarding trade in textiles, agriculture, services, and intellectual property were major achievements. Finally, new sets of rules regarding administered protection came into effect with the creation of the WTO in 1995.
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