GATT = general agreement on tariffs & trade

Posted: July 13, 2010 in INO
  1. In 1947, 23 countries signed an agreement related to tariffs imposed on trade.
  2. this agreement known as ‘GATT’.
  3. initially GATT was established like a temporary arrangement but later it took the shape of a permanent agreement.
  1. GATT was signed in 1948 in Geneva.
  2. the HQs of GATT are situated in Geneva
  3. GATT was signed by 23 countries in 1947 at Geneva.
  4. India was one of the founder member of GATT.
  5. since 1994, 118 countries have been its members.
  6. GATT  was not an organization, but a treaty with a secretariat at Geneva.

Objectives :

i)                    To  provide equal opportunities to all countries in international market for trading purpose without any favor.

ii)                  To ensure a better living standards in the world as a whole.

iii)                To increase the effective demand for real income growth & goods.

  1. GATT also introduced ‘MFN’ (most favored nation) clause.
  2. according to this every member country was considered an MFN country.
  3. according to the MFN, clause, any concession given to any nation was automatically given to all the member countries.

GATT rounds:

  1. 8 rounds of GATT negotiations were held during its existence.
  2. the 1st six rounds were related to curtailing tariff rates.
  3. the 7th sound was entirely different from all the previous rounds because It included a number of new subjects for consideration.
  4. the 8th round is known as the Uruguay round, which was the most controversial one.
  5. the discussions in this round gave birth to WTO (world trade organization).

Uruguay round agreement:

  1. the Uruguay round began in December 1986 at ‘Punta-Del-Este’(Uruguay) & was supposed to have concluded at Brussels in 1990.
  2. the talks however failed & were resumed in Geneva in January, 1991& finally ended on December/15/1993.
  3. the round originally involved 105 participants but 117 countries were there in the end.
  4. the Uruguay round was special because it resulted in pacts in two sectors that were completely new to GATT.

i)                    services

ii)                  intellectual property rights.

  1. there were differences among participating countries on certain critical areas; no agreement could be reached.
  2. to break this deadlock Mr. Arthur Dunkel, director general of GATT, compiled a very detailed document, popularly known Dunkel proposals.
  3. India signed this proposal in Marrakesh, morocco in April 1994.
Part 1- 14 areas below Part 2- trade in services & reclassified part 1-14 areas.
Tariffs Market access
Non-tariffs measures TRIPS
Agriculture TRIMs
Textiles & clothing trade (multi-fiber agreement) Agriculture
GATT-articles Textiles
Subsidies Trade in services
National resource based products Institutional matters.
Tropical products
Safeguards
TRIPS
TRIMS (trade related investments measures)
Disputes settlements
Functioning of GATT system
Multilateral trade agreements & arrangements
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