UR Agreements:

The UR agreements resulted in fiuther cuts in tariffs on manufactures by the developed countries so that their average tariffs came down below 4 percent. Developing countries also made commitments.  But this was in the nature of bindings  rather than actual cuts. Till the UR, developing countries  had bound few  tariffs so they were free  to increase them. Most developing countries  bound their tariffs at a higher level than the actual tariffs they levied.  India was an exception to this. Most tariffs on manufactures were bound at about 35% and this required reduction in tariff as the actual rates were higher than the bound

rates. A start was made to deal with agricultural protection as all quantitative restrictions were tariffied (converted into equivalent  tariffs), and tariffs had to be  reduced. Furthermore, export  and  production  subsidies  granted  to agricultural exports also had  to be  reduced. Agreement was also reached  to phase out the Multi Fibre Agreement (MFA), though its implementation was considerably  delayed. The regime for protection of intellectual property  rights was strengthened, with the US getting almost all of what  it wanted, and the ability of countries to put  export  requirements  or  local input  purchase requirements on  foreign direct investment, measures  often  introduced  by developing countries, was eliminated.

Rules regarding  the use  of  contingent protection,  namely,  levying  of countervailing  and anti-dumping duties were clarified. The rules  regarding the use of protection under  the safeguard clause were not only clarified but  also tightened. The period for which protection could be granted to an  industry damaged by a surge in imports was limited.  But the major change was in the dispute settlement process.  The different  steps in  the process, first mutual negotiations, then the appointment of a panel and  finally  if  a  party was dissatisfied with the decision to appeal  to an Appellate Board, were clearly  laid out  and  time limits for each  stage prescribed. Furthermore,  an  important procedural change was made.  The rule of positive consensus, which required all parties  to agree on  acceptance, was changed  to  the  rule  of  negative consensus, under which  a report was accepted unless all parties agreed  on rejection. For instance, previously for a panel ruling  to  be  accepted  all members had to agree including the losing  party, which was unlikely. Now, for a panel  report not  to be accepted all parties had  to reject  it, and usually the winning party will not reject it.

Another innovation was the institution of the trade policy review. Periodically each country's trade policy would be reviewed and.discussed. The discussion resulted  in  greater transparency regarding a country's  trade  policies,  and enabled members to express unhappiness regarding aspects of a member's policy, putting either moral pressure on  the country or warning it  what to expect in  future negotiations.