The open world trading system, which has buttressed postwar prosperity and promoted harmony among nations, is under severe strain. Protectionist pressures and actions are rising in most countries, including the United States, and are eroding support for the trade rules embodied in the General Agreement on Tariffs and Trade (GATT). Some trading nations are beginning to explore the prospects for major new negotiations to deal with these problems and to counter the trend toward further controls. This study explores the substantive issues that should be addressed in the new trade talks, and discusses how those issues could best facilitate successful negotiations. It reviews basic conceptual issues that underlie the GATT system, and includes a strategy for dealing with specific trade problems as well as procedural reforms necessary to make the GATT work better. Particular attention is paid to the structural adjustment needs of industry and agriculture, and to integrating new areas such as services and investment more fully into the GATT system.
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