In January 1995, the world witnessed the emergence of a new international economic order with the launching of the World Trade Organization. The WTO, which succeeds the GATT, is expected to strengthen the world trading system and to be more effective than the GATT in governing international trade in goods and services in many aspects.

First trade liberalization all over the world is expected to increase via the dramatic reductions in trade barriers to which the members of the WTO are committed. Under the WTO, members are required to reduce their tariff and non-tariffs on manufacturing goods. In addition, protecting domestic agricultural sectors from foreign competition will become awfully difficult in the new WTO system.

Second, rules and regulation governing international trade will be more strongly enforced. Under the old system of the GATT, there were many cases where trade measures, such as antidumping and countervailing duties, were intentionally used solely for protectionist reasons. The WTO’s strengthened rules and regulations will significantly reduce the abusing of such trade measures by its member countries. The WTO is also equipped with an improved dispute settlement mechanism. Accordingly, we expect to see a more effective resolution of trade disputes among the member countries in this new trade environment.

Third, new multilateral rules have been established to cover areas which the GATT did not address, such as international trade in services and the protection of intellectual property rights. There still remain a number of problems that need to be resolved before international trade in services can be completely liberalized, and newly- developed ideas or technologies are fairly compensated. However, just the establishment of multilateral rules in these new areas is a distinguished contribution to the progress toward a global free trade system.

Along with the launching of the WTO, this new era in world trade is characterized by a change in the structure of the world economy. Today, a world-wide market for goods and services is rapidly replacing a world economy composed of relatively isolated national markets. Domestic financial markets have been integrated into a truly global system, and the multinational corporation is becoming a principle mechanism for allocating investment capital and determining the location of production sites throughout much of the world.