General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade

History The General Agreement on Tariffs and Trade (GATT) was first signed in 1947.

To provide an international forum That encouraged free trade between member statesBy regulating and reducing tariffs on traded goodsProviding a common mechanism for resolving trade disputes.

History The General Agreement on Tariffs and Trade (GATT) is A Treaty, not an OrganizationWas the outcome of the failure of negotiating governments to create the ITO (International Trade Organization)

The Bretton Woods Conference introduced the idea for an organization to regulate trade as part of a larger plan for economic recovery after World War II

As governments negotiated the ITO, 15 negotiating states began parallel negotiations for the GATT as a way to attain early tariff reductions

Once the ITO failed in 1950, only the GATT agreement was left. ObjectiveThe GATT's main objective was the Reduction of Barriers to International TradeThis was achieved through the Reduction ofTariff barriersQuantitative RestrictionsSubsidies on trade through a series of agreements

ObjectiveThe primary objectives of GATT was to expand international trade by liberalizing so as to bring about all round economic prosperity, the important objective are as follows as:-Raising standards of living.Ensuring full employment and large and steady growing volume of real income and effective demand.Developing full use of resources of the world.Expansion of production and international trade.FunctionsNational Treatment

Protection through tariff.

Dispute Settlement.

Trade Negotiation among Developing Countries.ProgressionIncreased world trade growth 1950s and 1960s around 8% a year on average With Trade growth, production growth was also witnessed.Recognition of multilateral trading system as the anchor for development and an instrument of economic and trade reform.OutcomesProtectionism:Every country started protecting their home industry.Unemployement:High rates of unemployment and constant factory closures led governments in Western Europe and North America.Other Factors:World trade had become far more complex and important than 40 years before The globalization of the world economy was underway Trade in services not covered by GATT rules Ever increasing international investments

Rise of WTOFactors such as Unemployment, Crisis, Ineffective Trade Laws, Poverty convinced GATT members that a new effort to reinforce and extend the multilateral system should be attempted.

That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation of the WTO.

Uruguay Round1986-1994 |123 countries participated |Chaired by Arthur DunkelThe last and largest round of GATT which led the foundation of GLOBAL VILLAGEIt involved trade of GOODS, SERVICES,TECNOLOGY and TRIPsAgriculture was the key concern of roundIt was scheduled to be completed in 1990 which did not happened due to lack of agreement between participating nations in areas such as patents, maritime and agriculture.

Uruguay RoundInitially it seemed that the purpose of round will fail but at the end it brought the biggest reform in the worlds trading system.

As the negotiation dragged on the DG of GATT Arthur Dunkel ,gave a draft in December 1991 for solving the problem of deadlock popularly known as Dunkel Draft.

The round was finalized on 15 April 1994 and was signed by 117 nations out of 123.

GATT & IndiaIndia was one of the 23 founding Contracting Parties to the General Agreement on Tariffs and Trade (GATT) that was concluded in October 1947.

India has often led groups of less developed countries in subsequent rounds of Multilateral Trade Negotiations (MTNs) under the auspices of the GATT. GATT & Indian Pharma Industry It was only after the GATT Trade Rounds that Indian Drugs Industry was allowed to patent its product.

But the price of the patent was very expensive.

GATT strengthened India's Pharma Sector.

Improved Research Base.

GATT & Indian Agriculture SectorThe main objective of the GATT Treaty is to reform world trade.

GATT and Indian Agri sector is divided into 3 main phases

Market Access.

Domestic Support.

Export Competition.

GATT & India Market Access.In this all the GATT members were replace all the Trade Barriers and to allow Indian Supplies into their country.Tariffs reduced by 24% to 36%.Domestic Support.Develop countries also supported India to grow their Domestic Consumption.India has a big Domestic Market.Export Competition.Indian Agriculture industry has always been strong. India used to Export to many developing and under developed countries.India only had competition when it comes to Sales in Developed Countries GATT & India Market Access.In this all the GATT members were replace all the Trade Barriers and to allow Indian Supplies into their country.Tariffs reduced by 24% to 36%.Domestic Support.Develop countries also supported India to grow their Domestic Consumption.India has a big Domestic Market.Export Competition.Indian Agriculture industry has always been strong. India used to Export to many developing and under developed countries.India only had competition when it comes to Sales in Developed Countries Thank you !...

GATT