GATT

PRESENTED BY, AMIT SINGHANIA

Gatt: The general agreement on tariff and trade, the predecessor of WTO was formed in 1948 as result of the international desire to liberalize trade.

Objectives of GATT
Raising standard of living

Ensuring full employment

A large an steady growing volume of real income and

effective demand Developing full use of the resources of the world Expansion of production and international trade

Features of GATT
Adhoc and provisional.
It had contracting parties. GATT system allowed domestic legislation to continue

even if it violated a GATT agreement. Less powerful, dispute settlement was slow and less efficient as compared to WTO.

Rules and conventions of GATT

Any proposed change in the tariff, or other type of

commercial policy of a member country should not be undertaken without consultation of other parties to the agreement. The countries that adhere to GATT should work towards the reduction of tariff and other barriers to international trade, which should be negotiated within the framework of GATT.

Principles of GATT
Non- discrimination:
No member country shall discriminate between the

members of GATT in the conduct of international trade. To ensure non- discrimination the members of GATT Agree to apply the principle of most favoured nation (MFN) to all import and export duties.

Principles of GATT
Prohibition of quantitative restriction:
GATT rules seek to prohibit quantitative restrictions as far as possible an limit the

restrictions on trade to the less rigid tariffs. Certain exemptions to this prohibition are granted to countries confronted with balance of payment difficulties. Import restrictions were allowed to apply to agriculture and fishery products.

Principles of GATT
Consultation:
By providing a forum for continuing consultation, it sought to resolve disagreements through

consultation. So far eight rounds of trade negotiations were held under the auspicious of the GATT. Each round took several years. latest Uruguay round, took more than seven years which clearly shows the complexity involved in the trade negotiations.

Kinds of GATT
GATT

GATT the agreement

GATT the organization

GATT the agreement: The agreement between the contracting parties

(governments) setting out the rules for the conducting international trade. GATT the organization:

Kinds of GATT
An international organization created to facilitate

discussions and administration related to the agreement, GATT the organization, ceased to exist with the establishment of WTO. The oldest version of GATT is called as GATT 1947, And new updated version is called as GATT 1994.

An evaluation of GATT
GATT was signed in 1947, only 23 nations were party to it. It

increased to 99 by the time of the seventh round and 117 countries participated in the next, i.e., the Uruguay round.
It achieved considerable trade liberalization. The

progressive liberalization of trade, however, suffered a setback since 1974, although the elimination of tariff barriers continued, even the developed countries have substantially increased non- tariff barriers since then.

An evaluation of GATT
Since the developed countries were protectionism when the developing countries were liberalizing. This was indeed a sad commentary on the GATT.
Thus GATT was converted from a provisional agreement into a formal international organization called WTO.

Thank you