By Kevin Buterbaugh, Richard Fulton
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Additional resources for The WTO Primer: Tracing Trade's Visible Hand through Case Studies
The GATT Rounds 27 The Dillon Round (1960–61) The United States called for the Dillon Round (Dillon was under–secretary of state and originated the idea) as a means of dealing with the trade repercussions of the formation of the European Economic Community (EEC). Although the GATT allowed for regional organizations and exceptions for their united trade policies, the EEC was getting more aggressive in its external tariff policies. Furthermore, the planning for its highly subsidized Common Agriculture Policy (CAP) began to put American agricultural exports in some peril.
The Smoot-Hawley Act was a still-potent motivator of this conference pushing most major trading states to reinvigorate trade in the postwar era on the foundation of free trade assumptions. Objections continued, of course, to the application of broad principles that might in any way negatively impact specific national interests. The necessity for loopholes to accommodate these interests was compelling. Most exceptions to general codes were aimed at protection of domestic industries and protecting the balance of payments in major European countries.
Government thought that the encouragement of imports was an easy way to help its friends without having to resort to extensive direct foreign aid. The tariff reductions in the first four rounds of GATT negotiations came relatively easily. Nontariff barriers (NTB) were slowly growing throughout the world, however, and the United States’ relative open-door policy began to chafe on American politics. S. S. policymakers preferred in these early years to ignore the violations of NTB rules embedded in Part 2 of the GATT.