and Washington Consensus Uruguay Round and Washington Consensus

Uruguay Round The Round came into effect in 1995 and has been implemented over the period to 2000 (2004 in the case of developing country) under the administrative direction of the newly created WTO. The Round transformed GAAT (General Agreement on Tariffs and Trade) into WTO.

The main objectives of the Uruguay Round were: to reduce agricultural subsidies to put restrictions on foreign investment, and to begin the process of opening trade in services like banking and insurance

Washington Consensus The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics. Williamson used the term to summarize the commonly shared themes among policy advice by Washington-based institutions at the time, such as the International Monetary Fund, World Bank, and U.S. Treasury Department, which were believed to be necessary for the recovery of Latin America from the economic and financial crises of the 1980s.

List of recommendations Fiscal policy discipline; Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment; Tax reform – broadening the tax base and adopting moderate marginal tax rates; Interest rates that are market determined and positive (but moderate) in real terms; Competitive exchange rates; Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs; Liberalization of inward foreign direct investment; Privatization of state enterprises; Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions; and, Legal security for property rights.

Agreements Under this consensus were created NAFTA (North American Free Trade Agreement)and DR-CAFTA (Dominican Republic-Central America Free Trade Agreement) agreements

Criticisms of the Washington Consensus policies The economists, such as Joseph Stiglitz and Rodrik, who have challenged what are sometimes described as the ‘fundamentalist’ policies of the International Monetary Fund and the US Treasury for what Stiglitz calls a ‘one size fits all’ treatment of individual economies. According to Stiglitz the treatment suggested by the IMF is too simple: one dose, and fast—stabilize, liberalize and privatize, without prioritizing or watching for side effects