General Agreement On Tariffs And Trade (Gatt)
The General Agreement on Tariffs and Trade (GATT) was a post-WWII multilateral treaty aiming to reduce tariffs and trade barriers, paving the way for the World Trade Organization (WTO).
Tumisang Bogwasi
Tumisang Bogwasi
What is General Agreement On Tariffs And Trade (Gatt)?
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. Its primary purpose was the substantial reduction of tariffs and other trade barriers, along with the elimination of preferences, on a reciprocal and mutually advantageous basis.
Established in 1947, GATT served as a provisional framework until a more robust international trade organization could be formed. While never officially an organization, it functioned as a de facto international body facilitating rounds of trade negotiations. These negotiations progressively lowered tariffs and addressed other non-tariff barriers, significantly expanding global trade volumes.
GATT laid the groundwork for the modern multilateral trading system, emphasizing non-discrimination and predictable trade policies. Its principles influenced subsequent trade agreements and ultimately led to the creation of the World Trade Organization (WTO) in 1995, which absorbed and expanded upon GATT’s framework.
Definition
The General Agreement on Tariffs and Trade (GATT) was a post-World War II multilateral treaty designed to promote international trade by reducing tariffs and other trade barriers among signatory countries.
Key Takeaways
- GATT was a provisional multilateral agreement established in 1947 to regulate international trade.
- Its main objective was to reduce tariffs and other trade barriers, fostering freer global commerce.
- GATT operated through a series of negotiation rounds that progressively liberalized trade policies.
- It laid down fundamental principles such as Most-Favored-Nation (MFN) treatment and National Treatment.
- GATT was ultimately superseded by the World Trade Organization (WTO) in 1995, which incorporated and expanded its rules.
Understanding General Agreement On Tariffs And Trade (Gatt)
GATT originated from the Havana Conference in 1947, intended as part of a larger plan to create an International Trade Organization (ITO). Although the ITO charter failed to be ratified, GATT proceeded as a standalone agreement, becoming the principal instrument governing international trade for nearly five decades.
The agreement was founded on several core principles aimed at fostering a stable and predictable global trading environment. Central among these was the Most-Favored-Nation (MFN) principle, requiring member countries to treat all other members equally, ensuring no discriminatory trade policies among them. Another key tenet was the National Treatment principle, which mandated that imported goods, once they have cleared customs, be treated no less favorably than domestically produced goods.
Throughout its existence, GATT facilitated eight rounds of multilateral trade negotiations. Each round addressed various aspects of trade liberalization, from tariff reductions to rules on subsidies, anti-dumping measures, and intellectual property. These efforts collectively contributed to a significant increase in international trade and global economic interdependence.
Formula (If Applicable)
GATT did not employ a specific mathematical formula for trade liberalization. Instead, its
