The General Agreement on Tariffs and Trade (GATT), established in 1947 by 23 nations, is a treaty aimed at reducing obstacles to international trade by cutting down on quotas, tariffs, and subsidies. Its main goal was to help stimulate economic recovery following World War II.
Over the years, GATT evolved and was enhanced, eventually leading to the formation of the World Trade Organization (WTO) in 1995, which took over the responsibilities of the original GATT organization. By that time, 125 countries had signed on to its agreements, which encompassed around 90% of global trade.
Currently, the Council for Trade in Goods, often referred to as the Goods Council, oversees GATT. This council is made up of representatives from all WTO member nations, with Ambassador Clare Kelly from New Zealand serving as the chairperson. The Goods Council includes 10 committees that focus on various topics such as market access, agriculture, subsidies, and anti-dumping measures.
Understanding about General Agreement on Tariffs and Trade
GATT was established to set guidelines aimed at eliminating or limiting the most expensive and unwanted aspects of the prewar protectionist era, particularly things like trade controls and quotas.
Additionally, the agreement set up a way for countries to resolve trade disputes. This framework allowed for multiple rounds of negotiations to lower tariff barriers. Overall, GATT was seen as a major achievement in the years following the war.
The History
GATT conducted eight rounds of meetings, starting in April 1947 and wrapping up in December 1993. Each session brought about important accomplishments and results.
- The initial gathering took place in Geneva, Switzerland, with representatives from 23 countries. The main agenda for this kickoff conference was tariffs, where members agreed on tax concessions that impacted over $10 billion in global trade.
- The next round of meetings kicked off in April 1949 in Annecy, France, with tariffs still at the forefront. This time, 13 countries participated, leading to an additional 5,000 tax concessions that lowered tariffs.
- In September 1950, the third round of GATT meetings was held in Torquay, England, involving 38 countries. They managed to pass nearly 9,000 tariff concessions, which cut tax levels by up to 25%.
- Japan joined GATT for the first time in 1956 during the fourth meeting, which included 25 other nations. This session took place in Geneva, where the committee once again worked to reduce global tariffs, this time by $2.5 billion.
The series of discussions and tariff cuts would carry on, leading to the development of new GATT rules. In 1964, GATT started addressing the issue of predatory pricing practices, commonly referred to as dumping. Then, during the 1970s, the Multifibre Arrangement (MFA) was established to manage international textile trade. The next significant milestone was the Uruguay Round, which took place from 1986 to 1993, culminating in agreements signed in 1994 that established the WTO.
Conclusion
Without GATT, the world would look completely different. Its commitment to free trade helped close the chapter on a troubling era of protectionism and economic struggles that contributed to World War II, setting the stage for years of economic expansion and greater globalization.