1. International Business Lecture No,29 By Dr.Shahzad Ansar

2. World War I to World War II 1918 - 1939
Great Depression
US stock market collapse
Smoot-Hawley Act (1930)
US had positive trade balance with world
Act imposes tariffs to protect U.S. firms.
Foreign response was to impose own barriers
US exports tumbled

3. General Agreement on Tariffs and Trade
WWII allies want international organization in trade arena similar to UN in political arena.
GATT proposed by US in 1947 as step toward ITO.
1948: Havana Conference.
Failed charter for the International Trade Organization.
GATT

4. General Agreement on Tariffs and Trade
19 original members grew to 120 nations by the time it was superceded by the WTO.
GATT members agree not to raise tariffs above negotiated rates.

5. GATT Negotiating Rounds
World Trade
World Income
Annual Growth Under GATT %
Geneva
Annecy
Torquay
Geneva
Dillon
Kennedy
Tokyo
Uruguay

6. Average Reduction in US Tariff Rates 1947 - 85
Index
Pre-Geneva
Tariff = 100
GATT Negotiating Rounds

7. 1980-1993: Disturbing Trends Pressures for greater protectionism:
Japan’s economic success.
World’s second largest economy.
World’s largest exporter.
The U.S.’s persistent trade deficit.
Many countries had found ways to avoid GATT restrictions.

8. Uruguay Round Most comprehensive trade agreement in history.
Created the World Trade Organization.
Impacted:
Agriculture subsidies (stumbling block: US/EU).