CODIFICATION OF INTERNATIONAL TRADE LAW

International trade law is a complex and rapidly expanding area with primarily four levels of  international trade relationships:  

➢ Unilateral measures (National Law)  

➢ Bilateral relationships (Canada-United States Free Trade Agreement)  

➢ Plurilateral agreements  

➢ Multilateral arrangements (GATT/WTO)  

HISTORY  

The General Agreement on Tariff and Trade (GATT) was the backbone of international trade laws  since 1948. It has provisions relating to rules of unfair trade practices, dumping and subsidies. In  1994, the World Trade Organisation was established as a substitute of GATT. This is because  GATT acted as a temporary fix to trade issues and the founders needed something more which  was concrete. In the aftermath of World War II, the leaders of the Western world were keen to  reverse the mistakes of economic isolationism that plagued the pre-war years. They believed that  free trade would in the long term be mutually advantageous for economic and security reasons.  Thus, the United Kingdom and the United States began discussing the establishment of a trade  organization. The job of this organization would be the creation and enforcement of a uniform set  of trade rules, agreed upon by its member states. Moreover, its intended goal was to promote trade  across international borders with limited government interference.  

International Trade Organization  

In 1945, the United States submitted a document to the United Nations, calling for the creation of  what was then called the International Trade Organization (ITO). This plan led to the  commencement of a long string of negotiation rounds, all with the purpose of promoting trade  across borders. 

For a variety of reasons, the ITO never materialized. Nevertheless, the concessions resulting from  the negotiations were recorded in what is known as the General Agreement on Tariffs and Trade  (GATT 1947). Given that the ITO never came into existence, no organization was formally  charged with implementing the GATT. Notwithstanding, the GATT was implemented through a  Protocol of Provisional Application, which lasted almost fifty years. Originally, the GATT was  controlled by industrialized nations, and therefore did not address the concerns of developing  countries. Notably, the Middle East was poorly represented in GATT 1947—only two of the  twenty-three Contracting Parties, Lebanon and Syria, were from this part of the world. Moreover,  many of the developing countries included as Contracting Parties had only recently left the sphere  of influence of European powers (e.g. Burma, India, Pakistan, etc.).  

Between 1947 and 1979, the GATT’s Contracting Parties undertook seven rounds of  negotiations—including the 1947 round. Throughout these years, the number of Contracting  Parties increased from a meagre twenty-three to a substantial one-hundred-and-two at the Tokyo  Round of Negotiations  

Uruguay Round  

The Uruguay Round and the Creation of the World Trade Organization (WTO) In 1986, the most  important round of negotiations to date commenced in Punta del Este, Uruguay. Known as the  Uruguay Round, this round led to the creation of an international organization devoted to trade.  The Marrakesh Agreement of 199411 marked the end of the Uruguay Round of negotiations and  the establishment of the World Trade Organization (WTO). It also marked the end of the GATT  years, but only to a certain extent. Although the GATT was no longer the pre-eminent international  trade “organization,” its rules, ancillary agreements, and concession schedules were adopted by  the WTO.  

The World Trade organization came into force in 1995 and was created after the long negotiations  took place under the auspices of the General Agreement on Tariffs and Trade (GATT).While  legally distinct from the GATT, you will see that the WTO and the GATT are interrelated. 

The initial objective was to create an International Trade Organization (ITO) to handle the trade  side of international economic cooperation, which was meant to join the two "Bretton Woods''  institutions, the World Bank and the International Monetary Fund (IMF). The project went on two  tracks:  

(1) drafting a Charter for an International Trade Organization (the ITO); 

(2) launching tariff negotiations on a multilateral basis.  

Conclusion  

The GATT was never intended to be an international organization but only to be a subsidiary  agreement under the ITO Charter. Nevertheless, the ITO did not materialize and the GATT came  into force by means of a Provisional Protocol, signed on 30 October 1947 and effective from 1  January 1948. The signatory countries to the Protocol agreed to apply the provisions contained in  the GATT until the ITO could take over its administration. Hence, for 47 years, the GATT served  as a de facto international organization, taking up some of the functions originally intended for the  ITO. The GATT developed rules for a multilateral trading system (MTS) through a series of trade  negotiations or rounds and it led to many International Trade Laws.  

Mohamed Sultan Maricar 

Crescent School of Law, Chennai