Duhaime's Law Dictionary


General Agreement on Tariffs and Trade (GATT) Definition:

Multilateral international trade treaty first created in 1947 and frequently amended.

Multilateral international treaty first created in 1947 and frequently amended (most recently in 1994, called the "Uruguay Round").

GATT provides for fair trade rules and the gradual reduction of tariffs, duties and other trade barriers, for goods, services and intellectual property.

The General Agreement on Tariffs and Trade (GATT) is the predecessor to the World Trade Organization (WTO). GATT was active under that name from 1947 until 1994, when WTO was founded. The records of GATT are now managed by WTO in Geneva.

According to the WTO (circa 2011):

"From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) provided the rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seemed well-established, but throughout those 47 years, it was a provisional agreement and organization.

GATT logo"GATT was provisional with a limited field of action, but its success over 47 years in promoting and securing the liberalization of much of world trade is incontestable. Continual reductions in tariffs alone helped spur very high rates of world trade growth during the 1950s and 1960s — around 8% a year on average. And the momentum of trade liberalization helped ensure that trade growth consistently out-paced production growth throughout the GATT era, a measure of countries’ increasing ability to trade with each other and to reap the benefits of trade.

"15 countries had begun talks in December 1945 to reduce and bind customs tariffs. With the Second World War only recently ended, they wanted to give an early boost to trade liberalization, and to begin to correct the legacy of protectionist measures which remained in place from the early 1930s. This first round of negotiations resulted in a package of trade rules and 45,000 tariff concessions affecting $10 billion of trade, about one fifth of the world’s total.

"The group had expanded to 23 by the time the deal was signed on 30 October 1947....

"The Havana conference began on 21 November 1947, less than a month after GATT was signed. The ITO Charter was finally agreed in Havana in March 1948, but ratification in some national legislatures proved impossible. The most serious opposition was in the US Congress, even though the US government had been one of the driving forces. In 1950, the United States government announced that it would not seek Congressional ratification of the Havana Charter, and the ITO was effectively dead. So, the GATT became the only multilateral instrument governing international trade from 1948 until the WTO was established in 1995.

"For almost half a century, the GATT’s basic legal principles remained much as they were in 1948 (although) efforts to reduce tariffs further continued. Much of this was achieved through a series of multilateral negotiations known as “trade rounds” — the biggest leaps forward in international trade liberalization have come through these rounds which were held under GATT’s auspices. The eighth, the Uruguay GATT trade round of 1986-94, was the last and most extensive of all. It led to the WTO and a new set of agreements."

The one characteristic of G.A.T.T that is so important is that it comes at free trade not at a bilateral level (between one country and another), or multilateral level (between several countries), but on an even, open worldwide field. That is important because, as Thomas Babington of England once wrote:

"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

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