General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade (GATT) An international trade agreement. Established by the UNITED NATIONS ORGANIZATION in 1948, and with a secretariat in Geneva, Switzerland, it had 125 member countries. The aim of its members (who together accounted for some 90% of all world trade) was to promote international trade by removing obstacles and trade barriers, to lay down maximum tariff rates, and to provide a forum for the discussion of trading policies. By the 1980s there were demands for modification of the GATT agreements. In 1986 the ‘Uruguay Round’ of talks (so called because they were held in the Uruguayan capital, Montevideo) undertook to resolve outstanding agricultural issues. The discussions, frequently deadlocked, continued into 1993 seeking a compromise agreement on farm subsidies, prior to talks in Geneva in 1994 for global trade deals. In April 1994 the Final Act of the Uruguay round was formally signed, concluding negotiations for broad cuts in tariffs and export subsidies and for the creation of the WORLD TRADE ORGANIZATION (WTO), which replaced GATT in 1996.