Marrakech Final Act Launches World Trade Organization, Global Trade Growth Expected

The signing of the 22,000-page Marrakech Final Act by 124 nations on Friday marked the culmination of seven and a half years of negotiations for the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), paving the way for the World Trade Organization to oversee implementation of the accord. The final hours of the four-day conference saw resolution of a dispute among European Union partners over banana import limits, but talks between the United States and Japan on opening Japan's domestic markets to more imports remained unresolved. The Marrakech Final Act is expected to stimulate world trade by $212 billion over the next eight years and 10-15 percent in the next five years, pending national legislature ratification, enforcement, and compliance.

Key Takeaways:

• The Marrakech Final Act is a 22,000-page document signed by 124 nations, marking the completion of the Uruguay Round of the GATT and the launch of the World Trade Organization.
• The EU resolved a dispute over banana import limits, with France and Germany agreeing to increase quotas and reduce duties over time.
• Talks between the US and Japan on opening Japan's domestic markets to more imports failed to produce results, with Japanese foreign minister Tsutomu Hata and US Vice President Al Gore describing their meeting as 'useful' but without accord.
• The GATT participants agreed to major cuts in import tariffs on industrial goods, with an average 40 percent reduction to be achieved in five installments.
• Tariff cuts of at least 33 percent will occur in construction and agricultural equipment, medical supplies, steel, beer, distilled spirits, pharmaceuticals, paper, toys, and furniture.
• The Uruguay Round also brought farm trade under the GATT umbrella, with tariff reductions and cuts in subsidized exports to be made over six years for advanced countries and 10 years for developing ones.
• The new WTO will meet at least once every two years and assume an expanded role in overseeing international trade.

Statistics:

• $212 billion: The expected increase in world trade over the next eight years due to the Marrakech Final Act.
• 10-15 percent: The expected growth in world trade volume in the next five years.
• 40 percent: The average import tariff reduction on industrial goods agreed upon by GATT participants.
• 5 years: The timeframe for implementing the first installment of tariff cuts.
• January 1, 1995: The date for the first installment of tariff cuts.
• 6 years: The period for tariff reductions and cuts in subsidized exports for advanced countries.
• 10 years: The period for tariff reductions and cuts in subsidized exports for developing countries.

Sources:

• United Press International