Page 264 - International Marketing

266 International Marketing BRILLIANT'S

3. Transparency: Article XI of the GATT for bade the use of direct
controls on trade, particularly quantitative restrictions, except under a few
designated circumstances. The rationale for banning quotas etc. was that
a quantitative restriction is a less transparent instrument for reducing im-
ports than a tariff.
This has two aspects:
First, when facing a tariff, producers exporting to the country con-
cerned have clear information on the barrier they have to surmount in order
to sell their goods and services, and they may, accordingly, choose the
volume they would like to supply subject to that information. However, in
case of a quantitative restriction, they face uncertainty about the volume
they would be allowed to export and about their net unit revenue.
Second, with a tariff the price-increasing effect is immediately appar-
ent to consumer in the importing country whereas the price raising effect
of a quota is less apparent.
TARIFF NEGOTIATIONS UNDER GATT
Venue
Round and year NPP Result of Negotiations
First 1947 Geneva 23 countries participated and signed
(Switzerland) GATT. 123 bilateral negotiations covering
45,000 items signed (worth $ 10 billion of
trade per annum).
Second 1949 Annecy
(France) Customs tariffs on 5,000 additional items
reduced.
Third 1950-51 Torquay 38 countries participated. Tariff con-
(U.K.) cessions on 8,700 items announced.
Fourth 1956 Geneva Further cut on goods entering international
(Switzerland) trade announced. Value of merchandise
trade subjected to tariff cuts estimated at
$ 2.5 billion.
Fifth 1960-61 Geneva Negotiations covered the approval of
(Dillon Round) (Switzerland) Common External Tariff (CET) of the
European Community and tariff cuts
amounting to $ 5 billion on 4,400 items.
Sixth 1964-67 Geneva 50 countries accounting for 75 per cent of
(Kennedy (Switzerland) world trade participated. In place of
Round) ‘product by product’ negotiations of the