Final Examination Review Notes
What did the Uruguay Round achieve, and what did it fail to achieve?
The Uruguay round.
Reducing agricultural tariffs and subsidies was the main objective of the
Uruguay round of trade talks, which began in 1987.
Four main parties emerged at the talks.
was Japan and Korea, intent on supporting their rice farmers.
Next was the EU, politically committed
to keeping high levels of farm supports.
Third was a group of countries, known as the Cairns Group,
which grow food surpluses for export and so would like to have free trade in food.
include Brazil, Canada, Argentina, Australia, Thailand, New Zealand and about a dozen others.
last position was that of the US, which was rather ambiguous.
The US exports tons and tons of stuff
and would like to promote free trade for that reason, but it also protects tons and tons of stuff.
discussed these protections are pretty well entrenched and it would like to keep these protections.
that’s a difficult case to make—it’s hard to say that we ought to be able to sell wheat in a free market
but go on protecting sugar.
Luckily there are thousands of different items involved in world trade and
this is a situation tailor-made for horse-trading, as you can imagine.
The problem of the EU.
So here we have these main camps, negotiating about agricultural
tariffs and subsidies.
These negotiations were very intractable, difficult to move forward.
The EU was
particularly difficult to move. The reason becomes apparent when you consider what the EU is.
Because it’s a common market, as we’ll discuss later, the EU has to negotiate as one voice, as if it were
one country, since one of the attributes of a common market is that the tariffs of all he members are the
But it’s not one country; it’s a group of countries. In other words, once the EU adopts a position
through its often very difficult internal negotiation, it then finds it even more difficult to move away
from the result so painfully arrived at.
Substantive disagreement but procedural agreement.
The Uruguay round of negotiations
went nowhere for seven years, though the early 1990s.
For the last three years it looked as if the
negotiations would collapse.
But the consequences of that would have been too unpredictable, and
unpredictable is bad; it makes long-range planning risky and difficult.
In addition, everybody
remembered the wild free for all in trade that went on before World War II, and nobody wanted that
Eventually, an agreement of sorts was reached, in some sense just so people could say there was
an agreement rather than because anything much was really decided upon about reducing tariffs and
You can divide the terms of the agreement into the substantive side and the procedural side.