Tokyo Round

Definition

The Tokyo Round was a multilateral trade negotiation that took place from 1973 to 1979 under the auspices of the General Agreement on Tariffs and Trade (GATT). It was a significant event in the history of international trade agreements, as it aimed to further reduce tariffs and non-tariff barriers to trade among the participating nations.

5 Must Know Facts For Your Next Test

1. The Tokyo Round was the seventh round of multilateral trade negotiations under the GATT, following the previous rounds in Geneva, Annecy, Torquay, and others.
2. The negotiations involved 102 participating countries and resulted in over $300 billion in tariff cuts, the largest tariff reduction agreement in history at the time.
3. The Tokyo Round also addressed non-tariff barriers to trade, such as subsidies, government procurement, and technical barriers to trade.
4. The agreements reached during the Tokyo Round laid the groundwork for the creation of the World Trade Organization (WTO) in 1995, which replaced the GATT as the primary international organization governing global trade.
5. The Tokyo Round's focus on reducing non-tariff barriers was a significant shift from previous GATT rounds, which had primarily focused on lowering tariffs.

Review Questions

• Describe the key objectives and outcomes of the Tokyo Round of GATT negotiations.
  • The primary objectives of the Tokyo Round were to further reduce tariffs and address non-tariff barriers to trade among the participating countries. The negotiations resulted in over $300 billion in tariff cuts, the largest such agreement at the time. Additionally, the Tokyo Round addressed a range of non-tariff barriers, such as subsidies, government procurement, and technical regulations, laying the groundwork for the creation of the World Trade Organization (WTO) in 1995, which replaced the GATT as the primary international organization governing global trade.
• Explain the significance of the Tokyo Round in the context of the Bretton Woods Institutions.
  • The Tokyo Round was a significant event in the history of the Bretton Woods Institutions, as it represented a shift in the focus of international trade negotiations from primarily reducing tariffs to also addressing non-tariff barriers. This shift was important because non-tariff barriers had become increasingly prevalent and were seen as a growing obstacle to free trade. The agreements reached during the Tokyo Round, particularly those related to subsidies, government procurement, and technical regulations, helped to pave the way for the creation of the World Trade Organization, which was designed to more effectively address these types of trade barriers on a global scale.
• Analyze the long-term impact of the Tokyo Round on the evolution of the global trading system and the Bretton Woods Institutions.
  • The Tokyo Round had a lasting impact on the global trading system and the Bretton Woods Institutions. By addressing non-tariff barriers to trade, the agreements reached during the negotiations laid the groundwork for the creation of the World Trade Organization, which replaced the GATT as the primary international organization governing global trade. The WTO's broader mandate and more robust dispute settlement mechanism allowed it to more effectively tackle the complex trade issues that had emerged in the decades following the Bretton Woods era. Additionally, the Tokyo Round's focus on reducing non-tariff barriers represented a shift in the priorities of international trade negotiations, moving away from a narrow focus on tariff reductions towards a more comprehensive approach to facilitating free and fair trade. This shift has continued to shape the evolution of the global trading system and the role of the Bretton Woods Institutions in governing international economic relations.

Related terms

General Agreement on Tariffs and Trade (GATT): The GATT was an international agreement established in 1947 to promote free trade by reducing tariffs and other barriers to international trade.

Tariffs: Tariffs are taxes or duties imposed on imported goods, often used to protect domestic industries from foreign competition.

Non-Tariff Barriers: Non-tariff barriers are any measures other than tariffs that restrict or distort international trade, such as quotas, regulations, or subsidies.