Foreign Trade and Investment Law

Running head: FOREIGN TRADE AND INVESTMENT LAW
Foreign Trade and Investment Law
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1FOREIGN TRADE AND INVESTMENT LAW
The erstwhile GATT system that has now been replaced by the WTO or World Trade
Organization as well as the agreements that are contained in the famous Uruguay Round
Package is based on a General Agreement on Tariffs and Trade. This agreement was
negotiated in the year of 1947 by as many as twenty three participants and established central
principles which constrain as well as guide different types of nation-wide trade policies,
provided of course that governments are able to ensure multiple cooperation with regard to
trade.1 The WTO or World Trade Organization is a body, which has taken off from this
General Agreement as a basis for dispute settlement and institutional cooperation on various
types of trade matters among all the members of the organization. Although the GATT core
principles are those that continue to be in place even now, it is difficult to comprehend the
Uruguay Round Package unless it is analyzed in tandem with these principles.2 This essay
provides an analysis of the history of international trade agreements under the purview of the
GATT system and the World Trade Organization (WTO), as it came into being in the year of
1994.
GATT 1994 is in essence quite a short agreement. It lists all the different provisions
that are covered by it, while offering several explanatory notes at the same given time. While
it would certainly have been preferable if a fully revised and single GATT text is what had
emerged from the well-known Uruguay Round, such a case proved to be quite impracticable.3
1 Clarke, D., McGrady, B. and World Health Organization, 2018. Law and health taxes (No.
WHO/HGF/EAE/HealthTaxes/2017/Paper6). World Health Organization
2 Duque, G.A.G., 2019. Interpreting WTO Rules in Times of Contestation (Part 3) ‘Could the United States
Justify Its Tariffs on Aluminium and Steel Invoking Article XXI (b) of the GATT?’. Global Trade and Customs
Journal, 14(2), pp.80-89
3 Francois, J. and Whittaker, J., 2018. Colombia–Measures Relating to the Importation of Textiles, Apparel and
Footwear (DS461). World Trade Review, 17(2), pp.335-352

2FOREIGN TRADE AND INVESTMENT LAW
Even a simple rewriting of GATT 1947 to initiate such changes as a replacement of
references to the contracting parties on the part of the members of the WTO is something that
raised a number of difficult questions. A few of the changes could have been introduced and
that too without any kind of difficulty, there are others who could have raised issues and
which could have involved re-opening agreements that had been very painfully negotiated.
GATT 1994 is in essence an agreement which is comprised of four important elements. The
most obvious of these is the fact that these is an agreement that is a collection of important
provisions on trade as had been agreed upon in the previous General Agreement on Tariffs
and Trade that had been draw up and signed in 1947.4 An important thing to note in this
respect is an exception, which is that the provisions under the GATT agreement are those that
exclude very explicitly, the Protocol of Provisional Application. This Protocol of Provisional
Application is a legal instrument which constitutes the legal basis on which the GATT
Agreement of 1947 had been applied and in a general way. There are times when the Protocol
of Provisional Application or PPA as it is commonly known, is alluded to also as a
Grandfather Clause.5 It is a clause which permitted the signatories to the GATT agreement of
1947 to engage in the application of mandatory national laws that were not entirely consistent
with the terms and conditions of GATT, in spite of such inconsistency.6
By the year of 1994, none of the Pre-GATT agreement laws held any significance
whatsoever. Only one of these continued to be in effect and that was the Jones Act. The Jones
Act gave the United States of America the right to keep its domestic shipping routes reserved
4 Hahn, M., 2018. The Multilateral and EU Legal Framework on TDIs: An Introduction. In The Future of Trade
Defence Instruments (pp. 3-16). Springer, Cham.
5 Hoda, A., 2018. Tariff Negotiations and Renegotiations under the GATT and the WTO: Procedures and
Practices. Cambridge University Press
6 Koul, A.K., 2018. WTO Agreement on Rules of Origin, 1994. In Guide to the WTO and GATT (pp. 191-204).
Springer, Singapore.