This paper will discuss the effects of GATT and the WTO on U.S. trade law. The first part of the paper will discuss GATT and the relevant provisions of U.S. law. The second part will discuss the WTO's effects on U.S. law.
The General Agreement on Tariffs and Trade (GATT) establishes rules for the conduct of trade by more than 85 contracting countries and some 30 countries who apply GATT to their own foreign trade. GATT also functions as the primary international forum for the multilateral discussion of trade relations and the negotiation of reduced trade barriers. It is founded on a few basic principles: (1) a basic mandate for multilateral consultation to the real equitable resolution of trade disputes; (2) the general prohibition of quantitative restrictions upon imports; (3) an emphasis upon nondiscrimination through the use of "most favored nation" status by contracting countries; and (4) protection for domestic industries should only be through the use of customs tariffs, rather than nontariff measures.
GATT establishes a standard of material injury for both antidumping and countervailing duty measures, stating that no such measure shall be levied unless there is a determination "that the effect of the dumping or subsidization . . . is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry." Prior to the enactment of the Trade Agreement Act amendments to the Tariff Act , U.S. law did not have a material injury standard.
One of the remedies available to domestic interests was to offset the comparative advantage held by imports subsidized by the exporter's government or by private concerns. The first such countervailing duty statutes in the United States were enacted in 1890 and 1897. The 1930 Tariff Act enacted countervailing duty statutes which required no showing of injury. Thus, export subsidies wer...