The General Agreement on Tariffs and Trade (GATT) was signed by 23 countries in 1947 with the aim of reducing trade barriers and tariffs to stimulate the global economy post-World War II. Over the years, the GATT has operated as an organisation and successfully completed eight rounds of negotiations. The ongoing Doha Development Round began in 2001. In 1994, the GATT reached an agreement involving 117 countries, leading to the establishment of the World Trade Organization (WTO). Currently, the WTO, with 164 members, enforces the GATT agreement. Thanks to the GATT, participating countries have seen a significant decrease in tariff rates, dropping from an average of 22% in 1947 to under 5% after 1994.
The General Agreement on Tariffs and Trade (GATT) is a legal agreement that was initially signed by 23 countries in 1947. Its main objective was to decrease trade barriers and promote international trade, thereby stimulating the global economy after World War II. Over the years, the GATT has operated as an organisation, completing eight rounds of negotiations. The ongoing Doha Development Round, which began in 2001, is the most recent round. In 1993, the GATT achieved an agreement among 117 countries, including the United States, known as the Uruguay Round. This agreement led to the establishment of the World Trade Organization (WTO), which enforces the GATT and oversees international trade. The GATT has been successful in reducing tariff levels among participating nations. In 1947, the average tariff rate among GATT members was 22%. However, by 1994, after the Uruguay Round, this average had decreased to less than 5%. For instance, if a country had a 10% tariff on imported cars prior to joining the GATT, they would need to lower it to a mutually agreed-upon level in order to participate in the agreement. This would facilitate easier and more affordable car exports from other countries, thereby increasing international trade and benefiting the global economy.
The General Agreement on Tariffs and Trade (GATT) is an international treaty that aims to promote free trade by reducing barriers such as tariffs and quotas between member countries.
GATT was established in 1947.
At its peak, GATT had 128 member countries. However, it was replaced by the World Trade Organization (WTO) in 1995, which currently has 164 member countries.
The main objectives of GATT were to promote trade liberalization, eliminate discriminatory treatment, and provide a forum for negotiations on trade-related issues.
GATT addresses tariff barriers by encouraging member countries to reduce their tariffs through negotiations and the principle of most-favored-nation treatment, which ensures that any concessions granted to one member country are extended to all other member countries.
GATT initially focused primarily on tariff barriers, but over time, it also addressed non-tariff barriers such as quotas, subsidies, and technical barriers to trade.
GATT provided a framework for resolving trade disputes through its dispute settlement mechanism. However, the WTO, which succeeded GATT, has a more robust and effective dispute settlement system.
GATT included provisions for the protection of intellectual property rights, particularly in the area of trademarks, copyrights, and patents. These provisions were further strengthened under the WTO.
Yes, a country can withdraw from GATT by notifying the other member countries. However, it is important to note that GATT has been replaced by the WTO, and countries can choose to withdraw from the WTO as well.
GATT aimed to promote the economic development of all member countries, including developing nations. It provided special provisions and exemptions for developing countries to help them integrate into the global trading system.
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This glossary post was last updated: 17th April 2024.
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