The General Agreement on Tariffs and Trade (GATT) is the 1947 agreement that provided a framework for the gradual reduction of tariffs and the expansion of trade since the Second World War. This document is one of the load-bearing walls of the modern world.
Douglas Irwin, Petros Mavroidis and Alan Sykes are working on a book on the origins of the GATT. Here's the Sept 19, 2007 draft of the introduction and first chapter: The Genesis of the GATT.
This first chapter...
...focuses on the negotiations between the United States, the United Kingdom, and other countries during and immediately following World War II that led to the Geneva conference. The GATT grew out of discussions between government officials from the United States and United Kingdom during the war. After seeing international trade stifled under the weight of protectionist policies during the 1920s and 1930s, officials from both countries had a compelling interest in pursuing policies that would reduce trade barriers and help expand world trade after the war. They sought to foster these conditions by creating a rules based framework for liberal trade policies that would reign in the use of trade restrictions as well as began the process of negotiating a reduction in those barriers.
While the U.S. and U.K. governments agreed on the most important and basic principles to be included in a trade agreement, they differed on many substantive details that affected the shape of the GATT. Once these two countries agreed on a document that could serve as a basis for negotiation, other countries were invited to participate in shaping the provisions of the ITO Charter and the GATT. Drawing on archival documents, the diaries and memoirs of participants, published and unpublished cable traffic and government memoranda, we aim to shed light on the political constraints on both sides of the Atlantic that affected the commercial policy discussions.
Roosevelt's Secretary of State, Cordell Hull, steps off the stage shortly after the start of this chapter, but he is the real hero of the story. Hull believed strongly in free trade and led the world's move away from the begger-thy-neighbor trade restrictions of the early 1930s. Unfortunately he was forced to retire for health reasons in 1944 and could not play a leading role in the GATT negotiations. However,
Although Hull retired as Secretary of State in November 1944 and was not directly involved in the GATT negotiations, he gave the State Department a strong and lasting intellectual direction. As America’s longest serving secretary of state and imbued with a deep ideological attachment to the reduction of trade barriers, Hull shaped the State Department’s approach to trade policy long after his departure....
While critics mocked his single‐minded focus on trade policy, Hull ultimately persevered in his quest to develop a more liberal international trade system based on multilateral cooperation. Almost undeniably, Cordell Hull is the father of the GATT.
Ultimately there will be two more chapters:
Chapter 2 examines the evolution of the GATT as a legal text. The first draft of a proposed charter for an International Trade Organization emerged from the State Department in August 1944. The first publicly released draft of the charter was published by the State Department in December 1945 on the basis of bilateral U.S.-U.K. discussions during the British loan negotiations. A subsequent draft emerged at the conclusion of multilateral consultation in London from September-December 1946. This multilateral meeting instructed officials working at Lake Success, New York, in January‐February to produce a draft of both a General Agreement on Tariffs and Trade and a charter for an International Trade Organization for consideration at the April 1947 Geneva meeting. This chapter traces how the provisions of the GATT evolved as a result of these meetings, and how the composition of the countries involved at each stage affected the specific details in the GATT text and shaped the form that it ultimately took.
In Chapter 3, we assess the GATT in light of recent economic theories that seek to understand the specific rationale for its existence. These theories include the idea that the GATT is motivated by terms of trade externalities across countries, by governments seeking external commitments to reduce the power of domestic interest groups, and by foreign policy considerations. This chapter uses the history developed in the previous chapters to enhance our understanding of the motivations (sometimes different across countries) for why they chose to sign an international agreement on commercial policy.
Hat tip to Jonathan Dingel: Preferential trade and World War II (Trade Diversion, Oct 21).
I've long believed that the Preamble to the GATT should get more attention. It reports, in two short paragraphs, pretty accurately what the Founders thought they were doing in the thirty-five Articles that follow.
Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods,
Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce,
Whether there was a 'shadow' fell between the idea and the reality (between the motion and the act) is another story.
Interesting, too, to compare this Preamble with that to the Marrakesh Agreement ("Establishing WTO") in 1994. Services is added. Phrases such as 'sustainable development' appear, as does the idea of 'developing countries' as a distinct group. But the other objectives are unchanged.
But otherwise
Posted by: Peter Gallagher | October 23, 2007 at 07:02 PM