Reconciliation of non-market economies : GATT trade rules
University of British Columbia
Master of Laws - LLM
Due to the abortion of the proposed Havana Charter and non-participation of the USSR and other State trading economies in the Charter negotiations, GATT has been acting as a traders' club - a club mainly beneficial to western •market economies. Its rules are formulated almost exclusively in favor of free trade on a comparative advantage and private enterprise basis. There is virtually no place for NMEs to have effective access. As one of the pivots of post-World-War-II multilateralism, GATT assumes a major role in compromising, integrating, regulating and supervising diversified member nations' trade laws and policies. Its legal framework, however, is inadequate to deal with the integration of NME. This is because GATT is framed essentially along the line of market ideology and minimal government intervention. NMEs, on the other hand, discard market ideology and adopt wholesale government intervention and central planning as a basic form of economy. While trading practice in NMEs is basically incompatible with the GATT-promoted free trade rules, accommodations were made to facilitate NMEs' request for membership. Consequently, Poland, Romania, Hungary and Yugoslavia became GATT members respectively during the 1960s and 70s. At that time East European countries maintained command state trading thus were unable to be fully integrated into the GATT-based international trade order. During negotiations on terms of NMEs' accession to GATT, GATT countries adopted an import commitments approach to solve the central and much debated issue of market access to NME countries. Despite its merits, the approach has been criticized notwithstanding the fact that no alternative has been suggested. Accordingly, the primary objective of the thesis is to rethink the existing approaches to NMEs in order to explore new ways of effectively integrating NMEs into the GATT legal framework. By approaching the thesis problem carefully, the writer arrives at the conclusion that although GATT would need new assumptions with a view to regaining a new consensus of broader international representation and participation, a considerable and substantial decentralization in the NME is unavoidable in order to adapt themselves into the GATT framework. In the meantime, it is stressed that all GATT countries should continue to facilitate NMEs' access to the GATT forum in the hope that NMEs being potential world traders would increase world prosperity and understanding by broader participation. World prosperity, needless to say, is the best guarantee of world peace and security.
General Agreement on Tariffs and Trade (Organization); International trade
Law, Peter A. Allard School of