Until negotiations collapsed in early December, the Uruguay
Round gave promise of being the most significant multilateral trade
negotiation since 1947, when the General Agreement on Tariffs and Trade
(GA TI) was implemented and tariffs levels of the industrial countries
were sharply cut. There are at least three reasons for this conclusion.
First, by agreeing at the outset to bring both agriculture and textiles
under GATT discipline, the participants created the opportunity for both
rich and poor agricultural exporting nations and relatively low-wage,
newly industrializing LDCs to benefit significantly from GATT-sponsored
trade negotiations. Prior to the Uruguay Round, the benefits to these
countries of such negotiations had been limited, since these two sectors
were excluded from any significant liberalization. Second, by agreeing
to formulate new rules relating to trade in services, trade-related
aspects of· intellectual property rights, and trade-related investment
issues, members took an important step in modernizing the GATT. As
economic globalization has accelerated, there is a growing realization
that arms-length merchandise transactions, the traditional concern of
the GATT, are only one aspect of the real-side economic relations of
current concern to national policy-makers and the economic interests
they represent Now international commercial activities also involve
merchandise trade among multinational firms and their foreign
affiliates, international trade in services among independent agents as
well as among affiliated enterprises, foreign direct investment
activities, production nf goods and services in foreign affiliates for
sale either abroad or at home, international flows of technology, and
temporary movements of labour across borders. Although the so-called new
issues in the Uruguay Round do not cover all of these matters, they go a
considerable way in making the GATT more relevant for dealing with the
problems of increasing internationalization.
Does Distance Matter for Trade in Services? The Case of Interprovincial Trade in Canada
