GATT

Definition

The General Agreement on Tariffs and Trade (GATT) was a multilateral treaty aimed at promoting international trade by reducing or eliminating trade barriers such as tariffs and quotas. Established in 1947, it played a pivotal role in the development of global trade rules and set the stage for the establishment of the World Trade Organization (WTO) in 1995, linking trade governance with labor standards and international regulations.

5 Must Know Facts For Your Next Test

1. GATT was created to provide a forum for negotiating trade agreements and to facilitate the reduction of tariffs and other trade barriers among member countries.
2. Over the years, GATT underwent several rounds of negotiations, with the Uruguay Round (1986-1994) being the most significant as it led to the establishment of the WTO.
3. The GATT principles include non-discrimination, transparency, reciprocity, and binding commitments to ensure fair competition in international trade.
4. Although GATT focused primarily on trade in goods, it laid the groundwork for broader discussions about labor rights and environmental standards in later agreements under the WTO.
5. GATT's success in reducing tariffs significantly contributed to the expansion of international trade and economic growth in the post-World War II era.

Review Questions

• How did GATT contribute to shaping international trade norms and practices?
  • GATT significantly shaped international trade norms by establishing rules that encouraged member countries to reduce tariffs and eliminate trade barriers. Its principles of non-discrimination and transparency provided a framework that facilitated fair competition among nations. By fostering an environment conducive to dialogue and negotiation, GATT helped create a more structured approach to global trade, which paved the way for future agreements under the WTO.
• Discuss the relationship between GATT and labor governance within the context of WTO regulations.
  • While GATT primarily focused on trade in goods, it indirectly influenced labor governance through its emphasis on fair competition. The WTO, which evolved from GATT, began incorporating discussions about labor standards as part of its broader commitment to sustainable development. By addressing how trade policies impact labor rights, the WTO has encouraged member countries to consider labor governance alongside economic objectives, linking global commerce with social responsibility.
• Evaluate the implications of GATT's principles on contemporary global trade agreements and their impact on labor standards.
  • GATT's principles have profoundly influenced contemporary global trade agreements by embedding concepts like non-discrimination and binding commitments into their frameworks. This has led to an increased recognition of labor standards as integral to trade negotiations, pushing countries to adopt policies that protect workers' rights while promoting economic growth. As nations navigate complex trade relationships today, GATT's legacy prompts ongoing discussions about balancing economic interests with ethical labor practices, making it a cornerstone for future global governance.

Related terms

WTO: The World Trade Organization is an international organization that regulates trade between nations, providing a framework for negotiating and formalizing trade agreements, and resolving disputes.

Tariffs: Taxes imposed by a government on imported goods, used to restrict trade by increasing the price of imported goods.

Trade Liberalization: The process of reducing government restrictions on international trade, aimed at encouraging free trade among nations.