International Trade:

GATT Treatment of Nonmarket Economy Countries

NSIAD-90-206FS: Published: Aug 1, 1990. Publicly Released: Aug 1, 1990.

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Pursuant to a congressional request, GAO reviewed the General Agreement on Tariffs and Trade's (GATT) treatment of nonmarket economy countries in international trade.

GAO found that: (1) trade with nonmarket economies was applicable during the drafting of GATT, since there were no general policies governing their accession to GATT; (2) the process of becoming a contracting party to GATT was not automatic or unconditional; (3) because tariffs had a different significance in nonmarket economies, a substitute for tariff reductions was needed; and (4) integrating nonmarket economies into GATT was problematic because tariffs were the preferred instrument for governments trade regulation.

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