World Trade Organization Case Study

Alex Fein

BMGT392

26 February 2015

Case 3: The World Trade Organization

1.) I would speculate that the growth of world exports is constantly increasing at a higher rate than world GDP due to: the falling costs of trade, as instituted by the WTO, the presence of regional trade agreements, such as the EU and NAFTA, and the overall productivity growth in the tradable goods sector. Specifically, the creation of GATT and the Uruguay Round undoubtedly played prominent roles in this process, as they each worked to expand bound tax rates across the globe and institute countless other policy reforms as a way of giving birth to the “multilateral trading regime”. This hypothesis is further supported by Exhibit 1, which highlights a distinct divergence between World Exports and World GDP following 1950 (shortly after GATT reached prominence) and an incredibly drastic discrepancy between the two following the 1990’s, when the Uruguay Round changed the global landscape.

2.) As aforementioned, the Uruguay Round instituted revolutionary changes to global tariff rates; however the monumental, worldwide negotiation also added several whole new chapters to the GATT regime. Firstly, it catalyzed the creation of the General Agreement on Trade in Services (GATS), which constituted the “first ever set of multilateral, legally-enforceable rules covering international trade in services” (4). These rules expanded the reach of the GATT regime considerably, because while GATT only covered goods, GATS covered nearly every form of tradable service, from banking and consulting to data transmission and even tourism. Additionally, the Uruguay Round also led to the creation of The Agreement on Trade-Related Intellectual Property Rights (TRIPS), a common set of rules to help guide the enforcement of copyrights, patents, trademarks, and intellectual property. Together, GATT, GATS, and TRIPS emerged as “the three central chapters of the new multilateral trading regime created during the Uruguay Round” (5).