General Agreement on Tariffs andTrade (GATT) It was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization in 1995. GATT is a multilateral agreement regulating trade among 153 countries
GATT……. The General Agreement on Tariffs and Trade (GATT) covers international trade in goods. The workings of the GATT agreement are the responsibility of the Council for Trade in Goods(goods council). The Goods Council has 10 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on).
Purpose of GATT According to its preamble, the purpose of the GATT is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."
Introduction of WTO World Trade Organization (WTO) was established on 1st January 1995. It is the only global international organization dealing with the rules of trade between nations. The WTO (World Trade Organization) is an association of 146 member countries, of the 190 countries in the world today. There are another 30 countries that have observer status, a step that precedes becoming a full-fledged member. So almost all the countries in the world are members. There are all types of countries in the WTO, capitalist, socialist, rich and poor countries, very industrialized and also developing countries.
Objective of WTO Raising standard of living & income. Promoting full employment Expanding production & trade, and optimum utilization of resources. Introduce sustainable development Promoting trade flows. Establish procedures for solving trade dispute among members.
Basic principles of WTO1.Non – discrimination:- This principle is based on the concept of normal trade relations-previously called most favored nation(MFN). This rule required that het WTO members extend the same favorable terms of trade to all the member that they will extend to any single member.
Basic principle2.Transparency :- It is the pillar of WTO. All members are required to publish their trade regulations ,-To establish & maintain administrative decisions affecting trade.-To respond to the information by other members and to notify changes in trade policies to WTO.
Basic principle3.Binding & Enforceable Commitments:- In WTO, when countries agree to open their market for goods and services, they bind their commitments.4.Reciprocity :- It operates during negotiations with the objective of obtaining mutually beneficial arrangements through reciprocal reduction in tariffs binding.
Function of WTO Administrating & implementing the multilateral & plurilateral trade agreements which make up the WTO; Acting as a forum for multilateral trade negotiation; Seeking to resolve dispute; Overseeing national trade policies; Cooperating with other institutions involved in global economic policy-making.