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World: General Agreement On Tariffs And Trade Celebrates 50th Year

  • Robert Lyle

Washington, 5 March 1998 (RFE/RL) -- It has been 50 years since the first start at a global trading system began with an international organization to regularize trade -- the General Agreement on Tariffs and Trade, known as the GATT.

The early GATT was not global, having only a handful of western member nations and focusing on but a narrow range of manufactured products and the tariffs nations imposed on those imported from abroad.

Today, the global trading system, under the successor World Trade Organization (WTO), encompasses 132 member nations who agree on a huge array of trading questions from goods to services to financial investments. They deal not only with monetary tariffs but with all kinds of other restrictions that can hinder that trade.

The Director-General of the Brussels-based WTO, Renato Ruggiero, says the most pressing need now is to move the rest of the global community -- especially the 31 nations making the transition to more market-based economic systems -- into the WTO as quickly as possible.

"The process of global economic integration will not wait for us," he told a conference in Washington Wednesday. Joining the WTO is not easy or like joining an organization that gives loans. It requires countries to make "major changes in national policies" and to sign binding commitments across the entire trade spectrum.

But he says countries which do that get "security and predictability" in their trade relations and gain tremendously from access to the system of settling international trade disputes.

As importantly, he said there is an increasing interrelationship between global finance and trade. The Asian financial crisis has already shown, he added, that the trade system will be a critical element in ending the crisis.

Ruggiero spoke to a conference marking the 50th anniversary of the multilateral trading system.

He noted that when it first began, the GATT was dealing with average tariffs of around 40 percent. Now, they are under four percent and the system is dealing with non-tariff barriers to trade as well.

U.S. Trade Representative Charlene Barshefsky told the conference that recent global agreements on information technology, basic telecommunications and financial services amounted to a triple play of global market opening measures. She said they will form the infrastructure of the 21st century.

However, she warned the WTO must quickly move ahead into the whole area of electronic commerce, especially the internet. When people can get information from around the world in fractions of seconds, and the world wide web grows by 1.5 million people every day, 65,000 every hour, it is a phenomenon that empowers people as never before.

The GATT and WTO have spent 50 years trying to undo what governments had done -- working to lower tariffs and other barriers to trade, said Barshefsky. But the world of electronic transmissions is, in trade terms, "pristine." No WTO members impose customs duties on cross-border telephone calls, fax messages or computer data links, she said, and this duty-free treatment should include the internet.

The time to act on it is now, she said, before any country tries to start imposing conditions on this new form of commerce.

Barshefsky echoed Ruggiero's call for getting the former communist nations into the WTO as quickly as possible. But she also agreed that getting these countries ready to join the system is a complex process.

These countries must be brought in on the right terms, she said. They must have "significant and enforceable" commitments to open markets, to operate transparent, non-discriminatory regulatory systems, and to treat both domestic and foreign firms the same.

The task is "difficult," said Barshefsky, but "ultimately attainable."