Blog > Issues in Depth > Trade > Multilateral Trade Liberalization: The Uruguay Round and the World Trade Organization |
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The Uruguay Round, which concluded with a series of multilateral agreements in 1994, addressed a number of issues that had never been discussed before in global trade negotiations. The first few rounds of GATT (as demonstrated in Figure 12) were focused on reducing or eliminating tariffs. In the Uruguay Round, however, two key agreements established new rules liberalizing trade in services and protecting copyrights, trademarks, and other forms of intellectual property. Other agreements clarified the relationship between sanitary regulations and trade and, for the first time ever, reduced agricultural trade restrictions worldwide.
The Uruguay Round also created the World Trade Organization (WTO), an international institution designed to ensure that trade between nations flows as smoothly as possible. The WTO acts as a forum for multilateral trade negotiation, administers multilateral trade agreements, decides trade disputes, and reviews national trade policies. It was the belated birth of the International Trade Organization, 50 years after the first effort in 1946.
Convinced of the benefits that would flow from participation in this rules-based multilateral trade system, dozens of countries, including many that only recently emerged from Communist rule, have joined or applied to join the WTO in the first six years of its existence. Seventy-six countries have been members of the WTO since its inception in January 1, 1995. As of May 2012, the WTO’s membership stands at 155.30 Russia is the largest country that has yet to become a WTO member, though it is currently quickly rising in status and power. Its status currently is that of an observer nation. China and Taiwan entered the WTO at the end of 2001. Current membership of the WTO accounts for more than 95 percent of world trade.
The trade liberalization achieved during the Uruguay Round is expected to be beneficial both to developed and developing countries, as Figure 12 illustrates. One attempt to quantify the impact of the Round concludes that the aggregate welfare gains are around $96 billion per year in the short run. Despite these global gains, the authors identify some developing countries that lose from the Round in the short run. In the long-term, almost all countries gain from the Uruguay Round agreement. The Doha Round will also allow developing countries to make further gains through their own unilateral liberalization.
30 World Trade Organization. (2012). Understanding the WTO.
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