Question

Comment on the importance of GATT, WTO and arrangements such as the NAFTA in ensuring trade is fair in the international environment. Discuss the impact of such agreements on the agricultural sector in a Caribbean country.

Answer 1

The General Agreement On Tarrifs and Trade (GATT) is a legal agreement between many countries,whose main purpose was to promote International trade by reducing or eliminating trade barriers like Tarrifs and quotas.It was first discussed during the United Nations Conference on Trade and employment and was the result of the failure of negotiating governments to create the International Trade Organisation (ITO). GATT and it's successor WTO,have successfully reduced Tarrifs .It was about 22% in 1947 which became 5% after the Uruguay round in 1999. NAFTA is a comprehensive trade agreement that improves virtually all aspects  of doing business within North America. NAFTA will eliminate tarrifs completely, and removes many of the non -tariff barriers such as Import licenses,that have helped to exclude U.S goods from the market .NAFTA has advantages and disadvantages both.Like Through NAFTA trade increased and economic output also got benefitted, there was growth in the jobs also and foreign direct investment also increased and prices of goods also reduced because of eliminating Tarrifs. With NAFTA there were job losses in some countries like California, New York, michigan and Texas. Certain Industries were directly impacted including manufacturing, automotive, textile, computer,and electrical appliance industries. NAFTA put Mexican farmers out of business .It allowed U.S government subsidized farm products in Mexico. Local farmers could not compete with the subsidized prices,as a result 1.3 million farmers were put out of business.It forced unemployed farmers to cross borders illegaly to find work for them.Unemployed Mexican farmers went to work in substandard condition .U.S companies degraded the Mexican environment to keep costs low.Agribusiness in Mexico used more fertilisers and other chemicals, inresulting increased pollution.Overall these agreement which were created to faster the economic growth have done some things which decreased economic growth especially for agricultural sector.