International Trade - Theory and Policy, 2010a

1.6 The Uruguay Round
LEARNING OBJECTIVE
1. Learn how the Uruguay Round of the General Agreement on Tariffs and Trade (GATT)
greatly expanded the coverage of trade liberalization efforts to previously uncovered
sectors.
The Uruguay Round was the last of eight completed rounds of the GATT. Discussion for the round began
in Montevideo, Uruguay, in 1986, and it was hoped that the round would be completed by 1990. However,
impasses were frequent, and the round was not finalized until 1994. One reason for the delay is that this
round incorporated many new issues in the negotiations.
In earlier rounds, the primary focus was always a continuing reduction in the bound tariff rates charged
on imported manufactured goods. As a result of seven completed GATT rounds, by the mid-1980s tariffs
in the main developed countries were as low as 5 percent to 10 percent and there was less and less room
for further liberalization. At the same time, there were a series of trade issues that sidestepped the GATT
trade liberalization efforts over the years. In those areas—like agriculture, textiles and apparel, services,
and intellectual property—trade barriers of one sort or another persisted. Thus the ambitious objective of
the Uruguay Round was to bring those issues to the table and try to forge a more comprehensive trade
liberalization agreement. The goals were reached by establishing a series of supplementary agreements on
top of the traditional tariff reduction commitments of the GATT. A few of these agreements are
highlighted next.
The Agreement on Agriculture (AoA)
Protections and support for agricultural industries began wholeheartedly during the Great Depression in
the 1930s. Not only were tariffs raised along with most other import products, but a series of price and
income support programs were implemented in many countries. When the first GATT agreement was
negotiated, special exceptions for agriculture were included, including an allowance to use export
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