The General Agreement on Tariffs and Trade (GATT) was a historic agreement that came into effect on January 1, 1948. Initially, it aimed to facilitate trade between participating countries by reducing and eliminating trade barriers, such as tariffs and quotas.
The GATT agreement was negotiated in the aftermath of World War II, with the primary goal of promoting global economic growth and stability. It was established as an international agreement to regulate and promote free trade, with the ultimate aim of creating a global trading system that would be fair and beneficial for all countries.
Before the GATT, many countries imposed high tariffs on imported goods, which made trade between countries more difficult and expensive. As a result, international trade was limited, and many countries suffered from a lack of access to markets and goods that they needed. The GATT was created to address these issues and promote economic growth through increased trade and competition.
The GATT agreement was based on several key principles, including the most-favored-nation principle, non-discrimination, and reciprocity. The most-favored-nation principle ensured that each participating country would receive the same treatment as other countries, with no preference given to any particular country. Non-discrimination ensured that all goods and services from participating countries would be treated equally, regardless of their country of origin. Reciprocity required that participating countries would remove trade barriers in proportion to the degree that other countries did the same.
Over time, the GATT has been transformed into the World Trade Organization (WTO), which now oversees the rules of international trade and is responsible for resolving trade disputes between countries. However, the initial goals and principles of the GATT have remained largely unchanged, with the WTO continuing to work towards promoting free and fair trade between participating countries.
In conclusion, the General Agreement on Tariffs and Trade was initially implemented to facilitate trade by reducing and eliminating trade barriers, with the ultimate aim of promoting global economic growth and stability. This historic agreement formed the foundation of the current international trading system and has continued to be an important tool for promoting open and fair trade between countries.