General Agreement on Tariffs and Trade (GATT)
General Agreement on Tariffs and Trade (GATT)
Why the General Agreement of
Tariffs and Trade was replaced with the World Trade Organisation?
Some of the reasons are listed
below.
- GATT lacked a
coherent institutional structure. World Trade Organisation (WTO)
incorporates the principles of GATT and provides a more institutional
framework for implementing and extending them.
- GATT was ad hoc and
provisional in nature, it was never ratified in the parliaments of member
countries.
- WTO and its
agreements are permanent, it has a strong legal basis, and member
countries have ratified it in their parliaments.
- GATT dealt with just
trade in goods, WTO covers services and intellectual property as well.
- WTO dispute
settlement is faster, its rulings can never be blocked.
What
is the GATT and its purpose?
General Agreement on Tariffs
and Trade (GATT) was an international trade agreement signed in 1947. 23
nations were signatories of this trade agreement. GATT came into effect on
January 1, 1948. The purpose of GATT was to liberalise trade by reducing
tariffs and reducing quotas among member countries. The member nations had to
remove all the trade discriminations. The 7 rounds of negotiations from 1947 to
1993 reduced average tariffs on industrial goods from 40% to 5%. The steps
taken at GATT led to economic globalization.
Is GATT still in Effect?
No GATT was replaced by
WTO in 1995. Uruguay round of GATT negotiations started in September 1986, and
it concluded on 15 April 1994 after nearly 8 years of negotiations. This
culminated in the formation of the World Trade Organisation (WTO).
How Many Countries were in GATT?
By the end of the
Uruguay Round of negotiations in 1994, 128 countries were part of GATT.
Pankaj Mandape
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