The full form of GATT is the General Agreement on Tariffs and Trade. But what does the full form of this acronym actually mean, and why is it so significant? General Agreement of Trade and Tariff is a global trade agreement that you must definitely know about and read up on. Let’s embark on a journey to learn more about the full form of GATT.
The Birth of GATT
The GATT was a global trade agreement that was signed on October 30, 1947, and 23 nations came together in Geneva, Switzerland, to sign this groundbreaking agreement. It was the first major trade agreement since the end of World War II, and it played a key role in rebuilding the global economy. The GATT came into force on January 1, 1948, and was replaced by the World Trade Organization (WTO) in 1995. Moreover, the primary aim of GATT is to reduce and eliminate barriers in international trade by measures such as subsidies, quotas, and tariffs.
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The Foundation of International Trade Rules
The GATT also established a set of rules for governing international trade. These rules were designed to ensure that trade was fair and predictable. Some of the trade rules that GATT followed are –
- Free trade policy – This meant that countries were encouraged to trade with each other without tariffs or other trade barriers. Tariffs are taxes that are imposed on imported goods. Quotas are limits on the amount of goods that can be imported.
- Non-Discrimination – This meant that countries could not treat goods from different countries differently.
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Evolution to WTO
Over the course of its existence, the GATT held eight rounds of negotiations, each of which resulted in further reductions in tariffs and other trade barriers. As a result of the GATT, international trade increased significantly.
The most notable of these negotiations was the Uruguay Round, which culminated in 1994 with the creation of the World Trade Organization (WTO) in 1995, replacing GATT. The WTO is a more comprehensive trade agreement than the GATT. It covers a wider range of trade issues, including trade in services and intellectual property.
The GATT was a landmark trade agreement that changed the world. It helped to create a more open and global trading system. This has benefited consumers and businesses around the world.
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