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ECONOMICS REPORT - World Trade Organization, Part 1

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This is Bob Doughty with the VOA Special English Economics Report.

The World Trade Organization is the international system for negotiating trade issues. The W-T-O was established in nineteen-ninety-five. But its roots go back to an agreement made soon after World War Two. Twenty-three nations approved the General Agreement on Tariffs and Trade, or GATT, in nineteen-forty-seven.

Three years earlier, the International Monetary Conference had taken place in Bretton Woods, New Hampshire. Negotiators succeeded in planning two important financial organizations. These are the International Monetary Fund and the World Bank. But the negotiators could not agree on a proposed organization for international trade.

GATT was meant to be temporary. Trade negotiations under GATT were carried out in a series of talks, called rounds. The first round produced cuts in import taxes on one fifth of world trade.

Later rounds produced additional cuts. And negotiators added other issues. In nineteen-sixty-three, the sixth round began. It was called the Kennedy Round, after President John F. Kennedy. He was shot in Dallas on November twenty-second, nineteen-sixty-three. This round of talks ended four years later. The results included an agreement against the trade practice known as dumping. That is where one country sells a product in another country at an unfairly low price.

The eighth round of talks began in Punta del Este, Uruguay, in nineteen-eighty-six. The Uruguay Round required seven-and-a-half years of meetings and work. In all, one-hundred-twenty-three nations took part.

The Uruguay Round set time limits for future negotiations. It dealt with import taxes as well as other trade barriers. It dealt with protection for intellectual property such as books, music and computer programs. The heavily protected trade in clothing and agricultural products also became issues for negotiation.

The nations that took part did not agree on everything. But they did agree on a new, permanent system to settle disputes. In April of nineteen-ninety-four, ministers of most of the one-hundred-twenty-three countries signed an agreement. This established the World Trade Organization.

The W-T-O has replaced the old GATT. But those first agreements remain the basis of international trade law. Next week -- how the W-T-O operates. This VOA Special English Economics Report was written by Mario Ritter. This is Bob Doughty.

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