Dillon Round

Published Apr 7, 2024

Definition of Dillon Round

The Dillon Round refers to a series of negotiations under the General Agreement on Tariffs and Trade (GATT) that took place from 1960 to 1962. Named after the then U.S. Treasury Secretary, C. Douglas Dillon, the Dillon Round aimed to address the trade issues and tariff reductions on a multilateral basis. It was the fifth round of such negotiations since the establishment of the GATT in 1947, with the overarching goal of reducing trade barriers and promoting international economic cooperation.

Outcome and Impact

One of the key achievements of the Dillon Round was the negotiation and agreement on tariff concessions which ultimately impacted trade amounting to approximately $4.9 billion, a significant figure at the time. Additionally, this round sought to clarify and improve the general rules and procedures governing international trade. It laid the groundwork for future discussions on more complex trade issues and set the precedent for the more ambitious Kennedy Round, which would follow.

While the Dillon Round might not have made dramatic progress in terms of significantly lowering global tariffs or introducing major new trade policies, it played a crucial role in maintaining the momentum of the post-war liberalization process and ensuring continued dialogues among trading nations. It highlighted the complexities of international trade negotiations and the need for a more structured approach to tariff concessions, which influenced the design and objectives of subsequent GATT rounds.

Why the Dillon Round Matters

The significance of the Dillon Round extends beyond the immediate results of the negotiations. It underscored the importance of multilateralism in addressing global trade issues and set a precedent for future trade negotiations to build upon. The round’s emphasis on building consensus among a diverse group of countries contributed to strengthening the international trade system and the principles of the GATT.

Furthermore, the Dillon Round played a part in addressing the disparities and concerns of smaller and less developed countries, highlighting the need for measures that would enable these countries to participate more effectively in the global trading system. This acknowledgment paved the way for more inclusive negotiations in future GATT rounds.

Frequently Asked Questions (FAQ)

What were the main differences between the Dillon Round and previous GATT rounds?

The Dillon Round differed from previous negotiations primarily in its focus and the scale of participation. While earlier rounds concentrated on reducing tariffs on a bilateral basis, the Dillon Round aimed at more comprehensive and multilateral negotiations. This round also saw increased participation from developing countries, highlighting a shift towards a more inclusive approach to trade negotiations.

How did the Dillon Round influence future trade negotiations?

The Dillon Round influenced future trade negotiations by illustrating the complexity of achieving substantial tariff reductions and the need for a more systematic negotiation framework. It played a pivotal role in shaping the Kennedy Round, which introduced the concept of “tariff harmonization” and led to deeper and more comprehensive tariff cuts. The challenges encountered during the Dillon Round also underscored the importance of non-tariff measures and the need to address them in subsequent negotiations.

What are the criticisms of the Dillon Round?

Critics of the Dillon Round argue that it achieved limited success in terms of substantive tariff reductions and failed to address significant non-tariff barriers to trade. Some view it as a missed opportunity to introduce more radical reforms to the international trade system. However, it is also recognized for its role in maintaining the momentum of trade liberalization and the GATT’s relevance during a period of significant geopolitical tensions.

In conclusion, while the Dillon Round may not have produced groundbreaking results, it was an important step in the evolution of global trade negotiations, contributing to the strengthening of the multilateral trading system and setting the stage for more ambitious future rounds.