The General Agreement on Tariffs and Trade (GATT) was created in 1947 to promote international trade through reduced trade barriers. It was replaced in 1995 by the World Trade Organization (WTO) which expanded the rules to include trade in services and intellectual property. The WTO oversees global trade agreements, acts as a forum for trade negotiations, and handles trade disputes between members. It has 153 member countries and aims to ensure trade flows freely, predictably and openly between nations.
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The General Agreement on Tariffs and Trade (GATT) was created in 1947 to promote international trade through reduced trade barriers. It was replaced in 1995 by the World Trade Organization (WTO) which expanded the rules to include trade in services and intellectual property. The WTO oversees global trade agreements, acts as a forum for trade negotiations, and handles trade disputes between members. It has 153 member countries and aims to ensure trade flows freely, predictably and openly between nations.
The General Agreement on Tariffs and Trade (GATT) was created in 1947 to promote international trade through reduced trade barriers. It was replaced in 1995 by the World Trade Organization (WTO) which expanded the rules to include trade in services and intellectual property. The WTO oversees global trade agreements, acts as a forum for trade negotiations, and handles trade disputes between members. It has 153 member countries and aims to ensure trade flows freely, predictably and openly between nations.
Copyright:
Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online from Scribd
The General Agreement on Tariffs and Trade (GATT) was created in 1947 to promote international trade through reduced trade barriers. It was replaced in 1995 by the World Trade Organization (WTO) which expanded the rules to include trade in services and intellectual property. The WTO oversees global trade agreements, acts as a forum for trade negotiations, and handles trade disputes between members. It has 153 member countries and aims to ensure trade flows freely, predictably and openly between nations.
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General Agreement of Trade and Tariffs (GATT) & World Trade Organization (WTO)
Index : Introduction to GATT Major Provisions of GATT The 128 countries that had signed GATT by 1994 World Trade Organisation Functions Features / Charachteristic Implementation and Monitoring Basic Principles China and The GATT/WTO Differences between GATT and WTO From GATT to WTO
Introduction: The General Agreement of Trade and Tariff was first signed in 1947. Was signed, To provide an international forum That encouraged free trade between member states By regulating and reducing tarrifs on trade goods Providing a common mechanism for resolving trade disputes.
What is GATT ? Technically, GATT was viewed as an agreement under the provisions of US Reciprocal Trade Act of 1934, and hence did not require approval of Congress. It was considered a provisional agreement that would be replaced once the ITO became operational to take over its functions. So GATT began its provisional existence on January 1, 1948, when 23 contracting parties signed the refused in 1950 to ratify the treaty establishing the ITO.
General Agreements on Tariffs and Trade:
Toward the end of World War II, representatives of the US and its Allied Forces endeavoured to work out the arrangements for a new world order in the post war era. As a result of these negotiations, after World War II the US and its Allies planned to establish three important international institutions to liberalize trade and payment. Three institutions (i) International Monetary Fund (IMF) was established to facilitate international payments. (ii) International Bank for Reconstruction and Development (iii) To facilitate free trade, International Trade Organization (ITO) was to be born.
Major Provisions of GATT
1. Tariff (i) GATT obligates each country to accord non discriminative, most favoured nation(MFN) treatment to all other contracting parties with respect to tariffs. (ii) MFN treatment does not mean free trade or national treatment. Imports from contracting parties are subject to tariffs or quotas. MFN treatment means that no other countries with some exceptions receive better treatment or lower tariffs..
2. Quantitative Restrictions GATT in general prohibits the use of quantitative restrictions on imports and exports. Exceptions (i) agriculture - when government needs to remove surplus of agricultural and fisheries products. Important to US (ii) balance of payments - to safeguard balance of payments. If a country's foreign exchange reserve is low.
3. Developing Countries
Special Provisions to promote the Trade of Developing Countries. In 1965, the contracting parties added Part IV (Trade and Development) to GATT. (i) Developed economies will give high priority to reduction/elimination of tariffs on products of LDCs. (ii) refrain from introducing tariffs and NTBs to such imports.
The 128 countries that had signed GATT by 1994
On 1 January 1995, the WTO replaced GATT, which had been in existence since 1947, as the organization overseeing the multilateral trading system. The governments that had signed GATT were officially known as GATT contracting parties. Upon signing the new WTO agreements (which include the updated GATT, known as GATT 1994), they officially became known as WTO members.
World Trade Organization
Location : Geneva, Switzerland Established:1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 153 countries on 10 February 2011 Secretariat staff: 640 Head: Pascal Lamy (Director-General)
Functions Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Co-operation with other international organizations
Features/Charachteristics The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters, and importers conduct their business. The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Implementation and monitoring
WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented. All WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by the country concerned and the WTO Secretariat.
Basic Principles The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy game, not with the results of the game. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO: Non discrimination, reciprocity, enforceable commitments, transparency, and safety valves.
China and the GATT/WTO
China was one of the 23 founding members of GATT. became a contracting party on May 21, 1948. The Kuomintang Government moved to Taiwan and withdrew from the GATT, May 5, 1950. In 1982, China was granted observer status in GATT. In June 1986, China requested "resumption" of its contracting party status, on the basis that the withdrawal (by the Kuomintang) was null and void. In May 1987, the GATT established the Working Party on China's Status China became a member of WTO in December 2001.
Achievements and Problems of GATT/WTO
Achievements GATT has enjoyed a membership of over 100 countries and generated about 85-90% of world trade. Trade liberalization in industrial products (Kennedy Round) Adopted codes on NTBs (Tokyo Round) Replaced by WTO on January 1, 1995.
Problems WTO failed to liberalize trade in agricultural products to any significant degree. This was one of the major goals of the Uruguay Round. Steady erosion of MFN principle by the EU, and to a less extent by the NAFTA. Article XXIV permits member countries to form a CU or FTA. The EU adopted VILs to keep out agricultural products, lowered duties to many African.
Difference between GATT and WTO
(i) GATT was a provisional agreement by contracting parties with no legal enforcement power. WTO is a binding permanent agreement by members. (ii) GATT only included trade in goods. WTO additionally includes trade in services, international investments and intellectual property rights. (iii) GATT has no provisions to settle trade disputes. WTO set up a dispute settlement body and disputes are quickly resolved.
From GATT to WTO
Over the more than four decades of its existence, the GATT system expanded to include many more countries. It evolved into a de facto world trade organization, but one that was increasingly fragmented as side agreements or codes were negotiated among subsets of countries.
CONCLUSION We herewith can safely conclude that WTO is better and more powerful than GATT. WTO surely made a whole world a village. In future also WTO will make trade between countries more smoother and faster and it will play more vital role in future also.
