General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade (GATT), former specialized agency of the United Nations. It was established in 1948 as an interim measure pending the creation of the International Trade Organization. However, plans for the latter were abandoned and GATT continued to exist until the end of 1995. Members of GATT were pledged to work together to reduce tariffs and other barriers to international trade and to eliminate discriminatory treatment in international commerce. The most important service of GATT was to negotiate multilateral extensions of tariff reductions through the application of the most-favored-nation clause . GATT also provided for regular meetings to consider other problems of international trade. An important GATT principle was that protection of domestic industries was to be done strictly through tariffs and not measures such as import quotas. The only exceptions permitted to GATT rules were those dealing with balance of payments difficulties, and these exceptions are carefully supervised. GATT provided the framework for most important international tariff negotiations from 1947 until 1994. The eighth, or Uruguay round, of GATT negotiations, which began in 1986 with 15 negotiating groups, was long stalemated by the issue of agricultural subsidies maintained by the European Community. The agreement that resulted (1994) from the Uruguay round led to the creation (1995) of the more powerful World Trade Organization (WTO) as a replacement for GATT. However, the GATT framework remained in place for a 12-month transition period.

General Agreement on Tariffs and Trade (GATT) United Nations agency of international trade, subsumed into the new World Trade Organization in 1995. Founded in 1948, GATT was designed to prevent ‘tariff wars’ (the retaliatory escalation of tariffs) and to work towards the reduction of tariff levels. Most non-communist states were party to GATT.

http://www.wto.org

General Agreement on Tariffs and Trade an agreement to implement a post–World War II global trade organization and treaty, which was signed by twenty-three nations on October 30, 1947, and enacted in January 1948. It was established during the Cold War to facilitate international and preferential trade agreements between countries, thereby strengthening the economies and political stability of participant nations. In 1995 it became the World Trade Organization.

It originated as a charter for the International Trade Organization, a proposed specialized agency of the United Nations that never came into being.