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The major aspects of GATTS (General Agreement on Tariffs and Trade) include the following areas mentioned as follows:
Agriculture:
Agriculture as an item in GATT has been widely discussed and debated.
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Under this agreement countries are allowed to use some non-tariff measures such as “import quotas” and subsidies. According to WTO, the objective of the agricultural agreement is “to reform trade in the sector and to make policies more market oriented” with a view to improving predictability and security for importing and exporting countries alike. Thus the agreement on agriculture relates to market access, domestic support and export subsidies.
According to WTO, “the agreement on agriculture does allow governments to support their rural economies but preferably through policies that cause less distortion to trade. It also allows some flexibility in way of commitments, which are to be implemented over a period of time. Developing countries do not have to cut their subsidies or lower their tariffs as much as developed countries and they are given extra time to complete their obligations. Least developed countries do not have to do this at all.”
The arguments which are usually raised against domestic support prices or for subsidised productions are that these encourage over production, quiz out imports, lead to export subsidies and low price dumping on world markets. Hence the developed countries agreed to reduce the agricultural support price by 20% over six years starting in 1995, the developing countries by 13% over ten years. The developed countries again agreed to cut the value of export subsidies by 36% over the six years starting in 1995 and the developing countries by 24% over 10 years. The developed countries also agreed to reduce the qualities of subsidised exports by 21% over the six years and the developing countries by 14% over the 10 years.
Health Standards and Safety:
Another important aspect of GATT is the maintenance of standards and safety “in order to protect human, animal or plant life or health, provided they do not discriminate or use this as disguised protectionism”. Here the member governments are to use international standards. However, WTO has allowed individual member countries to apply a scientifically justified higher standard; thus allowing them to use different standards.
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Textiles: This is a contentious area of GATT. Until the end of the Uruguay Round, trading in textiles was governed by bilateral agreements or unilateral action in terms of established quotas. Under the quota system, countries could impose a limit on imports of textiles into the domestic market. However, under WTO’s Agreement on Textiles and Clothing, this sector is to be fully integrated into GATT rules by January 2005 to bring to an end the quota system and to end the discrimination by the importing countries between exporters.