Agriculture Reference
In-Depth Information
Plate 5.2
Grain harvest equipment
While shipping more high-value products every year, the export of bulk commodities continues
to be important to U.S. agriculture. Photo courtesy of USDA Natural Resources Conversation
Service.
World Trade Organization
Political, social, and economic changes over the last decade alone have dramatically altered
the way business is done in the international marketplace as well as the number of entities
ready and willing to conduct international business. That growth and excitement has been
building signifi cantly over the course of the last fi ve to six decades.
In 1947, an international organization was established to reduce trade barriers through
multilateral trade negotiations. That organization was known as
GATT
(General Agreement
on Tariffs and Trade). Beginning in 1988, GATT negotiations intensifi ed with the goal of
developing a stronger organization. In 1995, the
World Trade Organization (WTO)
was
formed and all GATT agreements at the then current round of negotiations (the Uruguay
Round) were incorporated into the WTO. The WTO now has 153 members and WTO rules
apply to over 97 percent of international trade.
The WTO's efforts stretch beyond its parent organization's focus of reducing tariffs on
manufactured goods. Tariffs tend to distort markets because market signals (supply and
demand) are not communicated as effi ciently or effectively. The reduction of tariffs
(taxes on imported or exported goods) allows products to trade more freely. It is generally
recognized by most economists that free trade benefi ts society because costs and benefi ts are
more evenly distributed. The WTO works to eliminate nontariff barriers as well. It can be
used to mediate trade disputes, or to challenge environmental, health, and other regulations
