Essay: Purpose of General Agreement on Tariffs and Trade
Discuss the motives, nature and purpose of the original GATT (General Agreement on Tariffs and Trade), and the extent to which this purpose was achieved in the first six rounds of negotiations (through the mid-60’s)
Formed in 1947, General Agreement on Tariffs and Trade (GATT) was formed after the United Nation conference whose objective was to create the International Trade Organization failed. Though it ended in 1993, it was replaced by the World trade organization in 1995.
GATT major function was to enhance fair trade basically by decreasing and controlling the trade tariffs among the member countries. More so, its responsibility included providing a common ground to solve any trade disputes that arose between the member countries. Before it ceased to exist, it have become concerned about the intellectual property rights and the effects of global trade on the environment
In the General Agreement on Tariffs and Trade, there is a provision referred to as the most favored nation status. According to GATT, the member states are referred to as most favored nations when carrying out any trade transaction but this excludes any other treaties like the European Nations. The US refers this status as normal trade relations.
Since the inception of General Agreement on Tariffs and Trade, it has been able achieve majority of its objectives mainly that of reducing the trade tariffs. Among the major failure of GATT is the failure to maintain the Havana Charter that was meant to control unfair trade. The failure of this charter was caused by US who rejected it during the Torquay Round of 1951.