General Agreement on Tariffs and Trade (GATT) Definition
The General Agreement on Tariffs and Trade (GATT) is a multilateral trade agreement established in 1947 with the primary goal of promoting international trade through the elimination of trade barriers such as tariffs and quotas. It is considered to be a precursor to the World Trade Organization (WTO) which took over GATT`s role in 1995.
GATT was signed by 23 countries and became operative in 1948. The agreement covered a wide range of trade issues such as agriculture, textiles, and intellectual property rights. It aimed to create a transparent and predictable environment for trade by providing a framework of rules and regulations that govern international trade.
The main principles of GATT included:
1. Non-Discrimination – All countries are to be treated equally regardless of their economic status, and no country can use trade barriers to gain an unfair advantage.
2. Free Trade – The agreement aimed to promote the free flow of goods and services between countries.
3. Tariff Reduction – Countries agreed to gradually reduce tariffs on traded goods until they were eliminated altogether.
4. Consultation and Dispute Resolution – The agreement established a mechanism for the resolution of trade-related disputes between countries.
GATT went through several rounds of negotiations and amendments, with the most notable being the Uruguay Round in 1986-1994. This round saw the inclusion of new issues such as services, intellectual property, and investment among others. The Uruguay Round also gave birth to the World Trade Organization (WTO) which took over the administration of GATT and incorporated its principles into its mandate.
In conclusion, the General Agreement on Tariffs and Trade (GATT) was a multilateral trade agreement established in 1947 with the aim of promoting trade by eliminating trade barriers such as tariffs and quotas. It served as the foundation for the World Trade Organization (WTO), which currently administers and enforces trade agreements between member countries. The principles of non-discrimination, free trade, tariff reduction, and dispute resolution continue to guide international trade relations today.