Overview: international trade law
| Author | Jon R. Johnson |
| Pages | 1-20 |
OVERVIEW:
INTERNATIONAL
TRADE
LAW
International trade
law is the
body
of law
that
has
evolved under
the
postwar
international trading system
first
established
by the
(GATT)
that came into
effect
on 1
Janu-
ary
1948.
The
purpose
of the
GATT
was to
prevent
a
recurrence
of the
collapse
of
international trade that occurred during
the
period between
the
First
and
Second World Wars. This period
was
characterized
by
high
tariffs
and
retaliatory trade measures unilaterally imposed
by
trad-
ing
countries that devastated world trade
and
contributed
significantly
to
the
Great
Depression
of the
1930s.
When
the
consequences
of the
tar-
iffs
imposed
by the
disastrous U.S.
Tariff
Act
of
1930 became apparent,
the
United States endeavoured
to
reduce trade barriers with
its
trading
partners,
including Canada, through bilateral trade agreements. Follow-
ing the
Second World War, trading nations recognized that
the
only
effective
means
of
creating
a
stable
and
predictable international trading
system
was
through
a
multilateral structure
of
rules. Each participant
submitted
to a
common
set of
disciplines
that restricted
its
ability
to act
unilaterally
to the
detriment
of its
trading partners.
The
GATT
established
fundamental
principles
of
non-discrimina-
tion
recognized
by all
member countries,
and it
prohibited unilateral
tariff
action
by
binding
all
member countries
to
maximum
tariff
levels
on
most goods.
The
GATT
provided
the
means
for the
progressive
reduction
of
tariff
barriers through periodic multilateral negotiations.
Subject
to
exceptions,
the
GATT
prohibited
import
and
export
restric-
tions.
The
GATT
also introduced
disciplines
on the
unilateral application
1
2
INTERNATIONAL
TRADE
LAW
of
extraordinary trade remedies such
as
antidumping
and
countervail-
ing
duties
as
well
as
emergency actions taken against import surges.
A.
GATT: FROM INCEPTION
TO
THE
TOKYO ROUND
The
GATT
entered into
effect
on a
provisional basis
on 1
January 1948
with twenty-three signatories including Canada.
The
GATT
was in
effect
provisionally pending
the
establishment
of the
International Trade Orga-
nization,
a
supranational body that
was to
have been
the
third
pillar
of
the
postwar world order along with
the
International Monetary Fund
and
the
World
Bank.
Negotiations
for the
creation
of the
International Trade
Organization were completed
in
Havana
in
1952,
but the
U.S. Congress
refused
to
approve
the
implementing legislation
and the
International
Trade
Organization
was
never established.
The
GATT
continued
in
effect
without
a
formal
institutional structure until
the
establishment
of the
World Trade Organization (WTO) under
the
Agreement
Creating
the
World
Trade
Organization
(WTO
Agreement)
in
1995.
The
GATT
member countries engaged
in
successive rounds
of
negotiations throughout
the
1950s
and
1960s.1
The
objective
of
these
negotiating rounds
was the
reduction
of
tariffs,
and the
result
was a
dra-
matic reduction
in
tariffs
among
the
GATT
member countries during
this period.
For
example,
the
1964/67
Kennedy Round, which involved
seventy-two
countries
and the
European Economic Community (now
the
European Union), resulted
in a 35
percent average
tariff
cut for
60,000 industrial products.2
As
tariffs
fell,
non-tariff
barriers
to
trade
became
of
more concern than previously. These included discrimina-
tory
application
of
product standards, discriminatory government pro-
curement practices,
and
increasingly aggressive
use of
trade remedies
such
as
antidumping
and
countervailing duties.
As a
result,
the
Tokyo
Round,
which began
in
1974
and
ended
in
1979,
was the
first
serious
attempt
by the
GATT
contracting parties
to
address
the
question
of
non-
tariff
barriers,3
and the
result
was the
establishment
of
codes (Tokyo
1
1947 Geneva Round, 1949 Annecy Round,
1950/51
Torquay Round,
1955/56
Geneva
Round,
1960/61
Dillon Round,
1964/67
Kennedy Round.
2
E.-U. Petersmann, "The
Transformation
of the
World Trading System through
the
1994
Agreement
Establishing
the
World
Trade
Organization"
(1995)
6
E.J.I.L.
161 at
181.
The
chart presented
on
this page sets
out a
useful
summary
of all the
30
October 1947, Can. T.S. 1947
No. 29
negotiating rounds.
3 The
1964/67
Kennedy Round
had
resulted
in an
Antidumping Code.
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