The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade. The GATT agreement was signed by 23 countries in Geneva on October 30, 1947. The agreement was later amended and replaced by the World Trade Organization (WTO) in 1995.
The GATT agreement includes three major principles:
1. Most Favored Nation (MFN) Treatment: This principle requires that each member country must treat all other member countries equally. For example, if a country lowers its import tariffs for one member country, it must lower its import tariffs for all other member countries.
2. National Treatment: This principle requires that each member country must treat imported goods and services in the same way as it treats domestically produced goods and services.
3. Tariff Binding: This principle requires that each member country must bind its tariffs at a certain level. Binding means that the member country cannot raise its tariffs above the bound level.
The GATT agreement also contains several other important provisions, such as the following:
1. Trade without Discrimination: The MFN and national treatment principles prohibit discrimination between trading partners.
2. Reciprocity: Members must offer concessions (such as lower tariffs) to other members only on a reciprocal basis.
3. Progressive Liberalization: Members must progressively lower their tariffs and remove other trade barriers.
4. Transparency: Members must notify other members of any changes in their trade policies.
5. Exception: Members can take measures to protect their essential interests, such as public health, safety, and the environment.
The GATT agreement has been successful in reducing tariffs and other trade barriers around the world. As a result, world trade has increased significantly. The GATT agreement is an important part of the global trading system.
The General Agreement on Tariffs and Trade (GATT) is a set of multilateral trade rules negotiated among member countries of the World Trade Organization (WTO). The GATT’s General Council is the WTO’s highest decision-making body. The GATT has been superseded by the WTO’s more comprehensive and binding agreement, the General Agreement on Trade in Services (GATS).