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The General Agreements on Tariffs and Trade

September 12, 2023 kayratek Comments Off

The General Agreement on Tariffs and Trade (GATT) is an international trade agreement that was signed in 1947. GATT aimed to increase international trade by reducing tariffs and other trade barriers. The agreement was in effect until 1995, when it was replaced by the World Trade Organization (WTO).

One of the key objectives of GATT was to promote the liberalization of trade. This was achieved by reducing tariffs on imported goods and by eliminating other trade barriers, such as quotas and subsidies. The agreement also sought to create a more stable and predictable trading environment by establishing rules and regulations for international trade.

GATT was based on the principle of non-discrimination. This means that countries were not allowed to discriminate between their own products and imported products. This principle was enshrined in two key clauses: the most-favored-nation (MFN) clause and the national treatment clause.

The MFN clause required that any trade concession made by a country to one trading partner had to be extended to all other trading partners on an equal basis. This meant that countries could not give preferential treatment to their own trading partners.

The national treatment clause required that imported products be treated the same as domestically produced products. This meant that foreign products could not be subject to discriminatory regulations or taxes.

One of the most significant achievements of GATT was the establishment of the GATT Dispute Settlement System. This system allowed countries to resolve trade disputes through negotiation, rather than through retaliation or the use of force.

Another significant achievement of GATT was the Uruguay Round of negotiations, which took place from 1986 to 1994. This round of negotiations led to the creation of the World Trade Organization (WTO) and the signing of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Overall, the General Agreement on Tariffs and Trade was a landmark agreement that helped to promote international trade and reduce trade barriers. While it has since been replaced by the WTO, the principles and objectives of GATT continue to shape the global trading system.