What Is The Meaning Of General Agreement On Tariffs And Trade

“Fifteen countries began discussions in December 1945 to reduce and set tariffs. After the recent end of the Second World War, they wanted to give an early boost to trade liberalization and begin to correct the legacy of protectionist measures that have remained in place since the early 1930s. This first round of negotiations resulted in a set of trade rules and 45,000 tariff concessions for $10 billion, or about one-fifth of the world total. The General Agreement on Tariffs and Trade (GATT) was established in 1947 in Geneva, Switzerland, with a meeting of 22 nations. In 2000, there were 142 Member States and another 30 applied for admission. Each country`s detailed obligations to limit tariffs on certain items based on the amount negotiated and set in its tariff form the central core of the GATT`s international engagement system. “Free trade, one of the greatest blessings a government can bestow on a people, is unpopular in almost all countries.” The GATT had three main provisions. The most important requirement was that each member be obliged to confer the status of the most favoured country on any other member. All members must be treated the same with respect to tariffs. It excluded special tariffs between members of the British Commonwealth and the Customs Union. It allowed tariffs if their removal causes serious damage to domestic producers.

The fourth round returned to Geneva in 1955 and lasted until May 1956. 26 countries participated in the cycle. $2.5 billion in tariffs have been eliminated or reduced. THE GATT provides for fair trade rules and the phasing out of tariffs, tariffs and other barriers to trade in goods, services and intellectual property. In May 1963, ministers agreed on three negotiating objectives: the summit almost resulted in a third organization. This should be the very ambitious International Trade Organization (ITO). The 50 countries that started negotiations wanted an agency within the United Nations to create rules, not only for trade, but also for jobs, agreements on raw materials, trade practices, foreign direct investment and services. The ITO charter was adopted in March 1948, but the U.S. Congress and a few other countries refused to ratify it. In 1950, the Truman administration declared defeat and completed the ITO.

“THE GATT has been temporarily given a limited scope, but its 47-year success in promoting and ensuring the liberalization of much of world trade is undeniable.