1.1.3. Liberalisation on a worldwide scale

On a worldwide scale the most important development of the last decade surely was the establishment of the World Trade Organisation (WTO) that extends the General Agreement of Tariffs and Trade (GATT). Besides further reducing tariff and nontariff barriers with regard to goods (the traditional focus of GATT), a number of additional agreements were integrated into the WTO. These are the General Agreement on Trade in Services (GATS), an agreement on trade-related investment measures (TRIMS), and an agreement on trade-related aspects of intellectual property rights (TRIPS). Additionally, a number of more narrow changes in world trade were agreed upon as a consequence of the so-called Uruguay round. These include, e.g., substantial improvements with regard to trade in textiles and fibres (the so-called multifibre agreement).

All these steps have helped to decrease various components of international interaction costs. They have been decreased further by improvements in some of the internal decision-making procedures used in that international organisation. Before the Uruguay-Round, disputes could, e.g., only be settled unanimously, i.e., the state suspected not to have complied with GATT rules had to agree to the sanctions carried out against it. Needless to say, chances of ever being convicted were thus extremely low. This has considerably improved after having changed the procedures accordingly.

Over the last ten years, GATT/WTO have become a truly global organisation with membership now being 146 up from 95 in 1990. After having looked at liberalisation and deregulation as factors influencing international interaction costs from a geographic point of view, we will now turn to look at recent developments taking a sector-specific view.