The Uruguay Round Grand Bargain

Prior to the Uruguay Round developing countries negotiated mainly to secure unreciprocated access to the Organization for Economic Cooperation and Development (OECD) countries' markets. Most lacked the expertise and analytical resources for trade policy-making but that really didn't matter much because the focus of negotiations was on border barriers for industrial products, and also because agriculture was largely excluded. The tried and true General Agreement on Tariffs and Trade (GATT) model of reciprocity worked well as the negotiations were led by the United States and managed by the transatlantic alliance with the European Community. The Cold War contained severe trade friction eruptions and all was well with the world as trade grew faster than output and each fed the other. True, in the 1970s noises offstage about a New International Economic Order could be faintly heard in Geneva but barely in Washington or Brussels. The so-called Third World was largely ignored as a player in the multilateral trading system.

The Uruguay Round was a watershed in the evolution of that system. For the first time, agriculture was at the center of the negotiations and the European effort to block the launch of the negotiations to avoid coming to grips with the Common Agricultural Policy went on for half a decade. This foot-dragging also spawned a new single-interest coalition – the Australian-led Cairns Group, which included Southern countries from Latin America and Asia determined to ensure that liberalization of agricultural trade would not be relegated to the periphery by the Americans and the Europeans as it always had been in the past.