General Agreement on Tariffs and Trade (GATT) 1994 is a comprehensive multilateral agreement on international trade that was created to promote free trade by reducing trade barriers and promoting fair competition among member states. The agreement came into effect in 1995 and remains one of the most significant agreements in the history of international trade. In this article, we will delve into the history of GATT, its importance, and its impact on international trade.

History of GATT

The General Agreement on Tariffs and Trade (GATT) was formed in 1947 to promote international trade through the reduction of tariff barriers, quotas, and other impediments to trade. GATT was initially created as a provisional agreement and was intended to serve as a temporary framework for international trade until a more comprehensive agreement could be reached. However, the agreement remained in place for nearly five decades and was eventually replaced by the World Trade Organization in 1995.

GATT 1994 is essentially an updated version of the original GATT agreement. The 1994 agreement includes several new provisions that were not present in the original agreement, including provisions related to intellectual property rights, services trade, and agricultural subsidies.

Importance of GATT

The importance of GATT lies in its ability to promote free trade by reducing barriers to trade. The agreement facilitated the liberalization of international trade by reducing tariffs and other barriers to trade. As a result, GATT has contributed to the growth of international trade and has helped to promote economic growth and development in member countries.

GATT has also played a vital role in promoting fair competition among member states. The agreement has established rules for international trade, including rules related to the treatment of foreign firms, the protection of intellectual property rights, and the resolution of trade disputes. By establishing these rules, GATT has helped to ensure that member states compete fairly and that no country is unfairly disadvantaged in international trade.

Impact of GATT

The impact of GATT has been significant. Under the agreement, the average tariff rate for industrial goods has fallen from around 40% in the 1940s to less than 5% today. GATT has also facilitated the growth of international trade, increasing the volume of global trade by more than 500% since the agreement was first established.

In addition, GATT has helped to promote economic growth and development in member countries. By reducing barriers to trade, the agreement has made it easier for countries to export their goods and services, which has helped to increase economic growth and create jobs. GATT has also helped to promote the development of new industries and technologies, which has further contributed to economic growth and development.

Conclusion

In conclusion, the General Agreement on Tariffs and Trade (GATT) 1994 is a comprehensive multilateral agreement on international trade that has played a significant role in promoting free trade, fair competition, and economic growth and development among member states. GATT has helped to reduce the barriers to trade, facilitated international trade, and established rules for international trade. The agreement has had a significant impact on the global economy, and its legacy continues to shape international trade today.