The General Agreement on Tariffs and Trade (GATT) was an international treaty created in 1947 with the main objective of reducing trade barriers and promoting international trade. GATT played a vital role in shaping international trade policies and played a significant role in the formation of the World Trade Organization (WTO) in 1995.
GATT was negotiated and signed by 23 countries in Geneva, Switzerland, in October 1947 and came into effect on January 1, 1948. By the time of its conclusion in 1994, 125 countries had become signatories to the GATT agreement.
The primary aim of GATT was to reduce tariffs on goods traded between countries. It encouraged member countries to adopt policies that would promote free trade, provide fair competition, and remove discrimination in international trade. GATT also encouraged the liberalization of international trade by promoting the elimination of non-tariff barriers such as quotas and subsidies.
One of the significant achievements of GATT was the reduction of average tariffs from around 40% to less than 5% by the 1990s. This reduction in tariffs boosted international trade and contributed to the global economic growth of the post-World War II period.
GATT also played a role in facilitating negotiations between countries, enabling them to settle trade disputes. GATT provided a framework for the resolution of disputes through consultations and negotiations and established a dispute settlement system that was effective at resolving disputes.
The creation of the WTO in 1995 marked the beginning of a new era for international trade. The WTO built on the foundation established by GATT and strengthened international trade rules and regulations. The WTO has played a critical role in promoting world trade, particularly in developing countries, and has contributed to economic growth and poverty reduction.
In conclusion, the General Agreement on Tariffs and Trade (GATT) played a crucial role in shaping international trade policies and promoting free trade and fair competition. GATT contributed to the global economic growth of the post-World War II period by reducing tariffs on goods traded between countries, and facilitated the resolution of trade disputes between countries. The legacy of GATT lives on through its successor, the World Trade Organization (WTO), which continues to play a vital role in promoting international trade and economic development.