By Jonathan Reuvid
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Additional resources for A Handbook of World Trade: A Strategic Guide to Trading Internationally
The principle of non-discrimination is further elaborated in Article I on most-favoured nation (MFN) treatment and Article III on national treatment. Through the MFN rule, the type and method of trade privileges granted to the products of one trading partner automatically and unconditionally apply to the like products of all contracting parties. The least that can be said is that, over time, the principle of unconditional MFN treatment suffered from erosion and in some instances gave way to the practice of conditional MFN.
7 per cent in the Tokyo Round, it was a total failure in two important sectors (agriculture and textiles and clothing). Although, in principle, GATT rules covered all products, agriculture was dominated by government intervention. From the early 1950s onwards, with the blessing of GATT waivers, the USA and later the European Community (EC) heavily subsidized domestic production and protected high internal prices through both tariffs and import quotas. The problem was exacerbated in the early 1970s when the former Soviet Union entered world grain markets as a food importer and raised the spectre of world food shortages and dramatic 11 The Origins and Nature of the WTO price rises.
In addition, a strong US dollar lowered competitiveness of US exports on world markets and caused unprecedented trade deficits. It allowed newcomers, in particular Japan, to challenge the USA’s position as the number one economy in the world. HARASSMENT IN BETWEEN ROUNDS Dissatisfied with the way the General Agreement on Tariffs and Trade (GATT) did or did not represent their trading interests, the USA embarked on a path of unilateral activism in trade matters, backed up by tough domestic trade legislation.