IV-BS ABM

ABM 167 August 18, 2017

GATT (General Agreement on Tariffs and Trade)

Definition

The General Agreement on Tariffs and Trade was the first worldwide multilateral
free trade agreement. It was in effect from June 30, 1948 until January 1, 1995. It
ended when it was replaced by the more robust World Trade Organization.
(Source: "GATT and the Goods Council," WTO.)

Purpose

The purpose of GATT was to eliminate harmful trade protectionism. That had sent
global trade down 65 percent during the Great Depression.

By removing tariffs, GATT boosted international trade. It restored economic

health to the world after the devastation of World War II.

GATT and WTO

GATT lives on as the foundation of the WTO. The 1947 agreement itself is defunct.
But, its provisions were incorporated into the GATT 1994 agreement. That was
designed to keep the trade agreements going while the WTO was being set up.

Then, the GATT 1994 is itself a component of the WTO Agreement.

Member Countries

The original 23 GATT members were Australia, Belgium, Brazil, Burma (now
Myanmar), Canada, Ceylon, Chile, China, Cuba, Czechoslovakia (now Czech
Republic and Slovakia), France, India, Lebanon, Luxemburg, Netherlands, New
Zealand, Norway, Pakistan, Southern Rhodesia (now Zimbabwe), Syria, South
Africa, the United Kingdom and the United States. The membership increased to
100 countries by 1993.
WTO (World Trade Organization)

Definition

WTO covers a much broader purview, including subsidies, intellectual property,

food safety and other policies that were once solely the subject of national
governments.
The WTO also has strong dispute settlement mechanisms. As under GATT, panels
weigh trade disputes, but these panels have to adhere to a strict time schedule.
Role of WTO

Trade negotiations
Implementation and monitoring
Dispute settlement
Building trade capacity
Outreach
Indias Role in WTO

Founder member - India is a founder member of the General Agreement on

Tariffs and Trade (GATT) 1947 and its successor, the World Trade Organization
(WTO), which came into effect on 1.1.95 after the conclusion of the Uruguay
Round (UR) of Multilateral Trade Negotiations.

Stability and Predictability Indias participation in an increasingly rule based

system in the governance of international trade is to ensure more stability and
predictability, which ultimately would lead to more trade and prosperity for itself
and the 149 other nations which now comprise the WTO.

MFN - India also automatically avails of MFN and national treatment for its
exports to all WTO members. According to the WTO Secretariat Report, along
with the policy statement by the Government of India, India is expected to
snatch most of the business deals that are presently catering the developed
nations which includes major service based industries like telecom, financial
services, infrastructure services such as transport and power.