What is GATT


Abbreviation for General Agreement on Tariffs and Trade, General Agreement on Tariffs and Trade; Predecessor agreement, which culminated in the World Trade Organization (WTO), which was founded on 1.1.1995.

1. Origin: The GATT goes back to efforts by the USA to liberalize world trade. They proposed the establishment of an International Trade Organization (ITO) and the codification of a World Trade Charter (Havana Charter). Negotiations in London (1946) and Geneva (1947) led to the provisional implementation of the trade policy sections of the Havana Charter. They were adopted as GATT on October 30, 1947 by 23 states and came into force on January 1, 1948.

Since the Havana Charter never came into force due to a lack of ratification by the USA, the GATT remained the only international agreement on the Creating an internationalWorld trade order.

Countries: In August 1994 there were 123 contracting parties to GATT, 99 of them developing countries. Other countries de facto apply the GATT.

On April 15, 1994, after more than 7 years of negotiations, the results of the Uruguay Round of the GATT signed by 111 countries, which represents a new milestone for the world trade order. The GATT, which has only been applied provisionally so far, will be transferred to the WTO. The last ministerial conference in December 2005 was held in Hong Kong with 149 members (Doha Round). In addition to new topics, an increasing integration of the agricultural sector with the expiry of export subsidies was agreed. Further negotiations on investments, market access and Art. XXIV GATT with incompatibility.

2. Aims: Raising the standard of living, promoting employment and economic growth by intensifying the international exchange of goods. To achieve this, collective tariff reductions are planned, based on most-favored-nation treatment, liberalization and the principle of reciprocity.

3. Organization and procedure: The decision-making body is the Assembly of the contracting parties (of the member states with equal rights), which usually takes place annually, whereby resolutions are usually passed with a simple majority (in exceptional cases a qualified majority is required). Most of the time, decisions are made by consensus. office based in Geneva, since 1964 with UNCTAD operator of the ITC.

4. Principles and mode of operation: In the first part of GATT the Most Favored Nation established a non-discrimination between foreign products (equal treatment of trading partners at trade borders). Part 2 writes the National treatment firmly, non-discrimination of foreign versus domestic products (after crossing the customs border). Scope and organizational issues are dealt with in Part 3; In 1965, part 4 Special provisions for developing countries added. This is how the General System of Preferences (GSP) came into being, in which the industrialized countries granted trade preferences to the developing countries (deviation from the most favored nation treatment in favor of the developing countries).

Exceptions are possible to protect the balance of payments, for reasons of public order and health as well as national security. The principle of most favored nation treatment does not apply to customs unions and free trade agreements. In addition, the global agricultural trade is excluded from the GATT. Quantitative trade restrictions are not permitted under the GATT. However, global quotas are allowed for the agricultural sector and to protect domestic industry. Tariff cuts were achieved through negotiations.

So far there have been eight completed Inch rounds: 1947 in Geneva, 1949 in Annecy, 1951 in Torquay, 1956 in Geneva, 1960/1961 in Geneva (Dillon round), 1964–1967 in Geneva (Kennedy round), 1973–1979 in Geneva (Tokyo round), 1986 -1994 Uruguay (Uruguay Round). In addition to tariff reductions, non-tariff trade barriers were dismantled.

5. Effectiveness of the GATT: The GATT contributed to the global economic prosperity of the post-war period, import tariffs on industrial products were massively reduced, principles of non-discrimination, predictability and transparency allowed a relatively conflict-free development of world trade. In the area of Tariff cuts the greatest successes have been recorded. However, member countries are constantly confronted with new quantitative restrictions. The conflicts between the USA, Japan and the EU (punitive import tariffs) show the dangers to liberal foreign trade. They are especially difficult Removal of non-tariff barriers to trade as well as the Liberalization of agricultural trade.

Problems: The GATT lacks sanction mechanisms against major trading powers, the dangers arise from a global subsidy race and against gray area measures. Other difficulties arose from the failure to address trade in services and intellectual property protection, which were addressed in the Uruguay Round. As the Tokyo Round left behind a fragmented and fragmented system of different codes, which were not accepted as binding by all GATT contracting parties, calls for new treaty negotiations became loud. The Uruguay Round created a new world trade order through negotiations with 117 countries, which came into force in 1995 (GATT 1994).

6. The new GATT: WTO regulates the movement of goods in GATT. Tariff cuts between 33 and 100 percent are in the pipeline Uruguay Round arranged. The agriculture and textiles sectors are now also included, and the aim is to strengthen world trade rules. In addition, all GATT contracting parties must adopt all agreements of the Uruguay Round (single package approach). The GATS, which stipulates non-discrimination (most-favored nation treatment and national principle), applies to the service sector. In the short term the status quo will remain, in the long term progressive liberalization is mandatory. TRIPS deals with intellectual property, where non-discrimination has also been agreed and specific protective provisions and effective enforcement mechanisms have been adopted. The new GATT system thus forms a comprehensive set of rules for all world trade.

Publications: Including GATT Focus (monthly), GATT Activities (annually), International Trade (annually), Basic Instruments and Selected Documents Series (annually).

See also international order economics.