A System Of Agreements Between Nations

Before you begin your reading on the World Trade Organization (WTO), take a few minutes to watch the following video, which will give you a background on the General Agreement on Tariffs and Trade (GATT), and explain how it became the WTO we know today. Remember, the world is much smaller today than it was when your parents and grandparents were growing up, and international trade has not always been the norm. After watching the video, think about the impossibility of world trade without any kind of agreement between nations. The agreement between the Association of Southeast Asian Nations (ASEAN) and Korea came into force in 2007. It provides that Korea removes more than 76% of its tariffs on imports from ASEAN and that ASEAN members remove between 85 and 100 per cent of their tariffs on imports from Korea. The agreement also contains provisions on rules of origin, guarantees and transparency. The Trade in Services Agreement was reviewed in 2018 by the Regional Trade Agreements Committee. While the GATT aimed to promote tariff reduction between Member States and thus lay the groundwork for multilateral trade expansion, waves of regional trade agreements intensified over the next period. In less than five years after the creation of the GATT, Europe, with the creation of the European Coal and Steel Community in 1951, would begin a programme of regional economic integration which would ultimately become what we know today as the European Union (EU). Since Adam Smith praised the virtues of division of labour and David Ricardo explained the comparative advantage of trade with other nations, the modern world has become increasingly economically integrated. International trade has increased and the number of trade agreements has increased. While the trend over the past hundred years has been for greater openness and liberalization of trade, the path has not always been straight. Since the implementation of the General Agreement on Tariffs and Trade (GATT), the proliferation of multilateral trade agreements between three or more countries, as well as local and regional trade agreements, has undergone a double evolution.

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