The General Agreement of Tariffs and Trade

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The General Agreement of Tariffs and Trade

SOURCE "The General Agreement on Tariffs and Trade," Department of State, 1994.

INTRODUCTION On October 30, 1947, twenty-three countries came together under the auspices of the United Nations and agreed to The General Agreement on Tariffs and Trade (GATT), which took the place of the International Trade Organization (ITO), one of the three institutions to which delegates had agreed at the Bretton Woods conference in July 1944 (the others were the International Monetary Fund and the World Bank). The U.S. Senate had refused to ratify the ITO's charter because it would require each country to surrender its own power to regulate tariffs. Consequently, GATT replaced the ITO in the international economic order. In 1995 the functions of GATT were folded into a new agency, the World Trade Organization (WTO).

In the excerpts below, GATT's Preamble makes clear the Agreement's objectives, whereas the first paragraph of Part I addresses the primary means by which this is to be accomplished—through the extension of most-favored-nation provisions. ∎

Preamble

The Governments of the COMMONWEALTH OF AUSTRALIA, the KINGDOM OF BELGIUM, the UNITED STATES of BRAZIL, BURMA, CANADA, CEYLON, the REPUBLIC OF CHILE, the REPUBLIC of CHINA, the REPUBLIC OF CUBA, the CZECHOSLOVAK REPUBLIC, the FRENCH REPUBLIC, INDIA, LEBANON, the GRAND-DUCHY OF LUXEMBURG, the KINGDOM OF THE NETHERLANDS, NEW ZEALAND, the KINGDOM OF NORWAY, PAKISTAN, SOUTHERN RHODESIA, SYRIA, the UNION OF SOUTH AFRICA, the UNITED KINGDOM of GREAT BRITAIN AND NORTHERN IRELAND, and the UNITED STATES of AMERICA:

Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods,

Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce,

PART I

Article I

General Most-Favoured-Nation Treatment

With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III [ed. note: paragraphs concerned with domestic taxation and regulation], any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

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