<p>This paper focuses on the General Agreement on Trades and Tariffs (GATT)/World Trade Organization (WTO). It concludes that they may affect the Philippine economy in three ways: through changes in tariff structure resulting from the country’s commitment in the Uruguay Round, through the expansion of world trade as developed and less developed countries adjust their protection structures and through the changes in the prices of tradable goods as both 'developed' countries and 'less developed' countries realign their trade and non-trade barriers. The paper simulates the possible effects of these developments in the local economy. In particular it aims to determine whether the impact is favorable at the macroeconomic level and whether it is progressive in terms of income distribution.</p>