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Soon after the Tokyo round ended in 1979, industrialised countries argued that a new round would be needed. They wanted new areas of trade to be brought into the Agreement. Most developing countries did not want a new round. They argued that GATT should deliver on past promises (eg. removal of tariffs on tropical products), and they did not want new issues on the table.

So, guess what happened? The eighth round (the Uruguay Round) was launched in 1986, and new issues were introduced. At the conclusion of this round of negotiations, the principles of the GATT were incorporated into a permanent body called the World Trade Organization.

What new issues were introduced in the Uruguay Round?

The Uruguay Round introduced the following new issues into international trade negotiations

  • Trade in Services.

  • International Investment flows (TRIMs -trade related investment measures).

  • Protection of Intellectual Property rights (TRIPs -trade related intellectual property rights).

  • Agriculture.

  • Textiles and Clothing (previously regulated under the Multi-Fibre Agreement).

Why were these new GATT issues so significant?

By the late 1980s tariffs were already very low. Because of Structural Adjustment policies imposed by the International Monetary Fund, developing countries had been lowering their tariffs unilaterally throughout the 1980s. Industrialised countries were not required to reciprocate.

In fact, trade negotiations became less and less about trade, and more and more about industrial restructuring. GATT negotiations began to intrude into national policy making.

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