General Agreement on Tariffs and Trade (GATT) is a multilateral agreement that was signed in 1947 by 23 countries. The agreement aimed to reduce tariff barriers and facilitate free trade, thereby promoting economic growth across nations. GATT was the first agreement of its kind, and by 1994, over 123 countries had joined the agreement. In 1995, GATT was replaced by the World Trade Organization (WTO), which continues to enforce the principles of free trade and fair competition that were established by GATT.
The GATT agreement focused on three core principles: non-discrimination, elimination of trade barriers, and promotion of fair competition. The principle of non-discrimination was established to ensure that no country would be discriminated against in the international trade market. This principle was accomplished through the most-favored-nation (MFN) principle, which required that each country must extend the same tariff rates to all its trading partners.
The second core principle of GATT was to eliminate trade barriers such as tariffs, quotas, and other protectionist measures. The agreement aimed to reduce tariff rates gradually to promote free trade among the member nations. This was accomplished through successive rounds of negotiations, where countries agreed to lower tariffs in exchange for lower tariffs from other countries.
The third core principle of GATT was to promote fair competition. The agreement encouraged the use of transparent and predictable trade rules, which ensured that all countries could trade on equal terms. This was accomplished through the establishment of dispute settlement procedures, which allowed member countries to challenge any trade measure that they felt was unfair.
In conclusion, the General Agreement on Tariffs and Trade (GATT) was a historic multilateral agreement that paved the way for more open and transparent international trade. The agreement focused on three core principles of non-discrimination, elimination of trade barriers, and promotion of fair competition. GATT was the first agreement of its kind and acted as a catalyst for the spread of free trade and economic growth across the globe. The agreement was replaced by the World Trade Organization (WTO) in 1995, which continues to enforce the principles established by GATT.