The General Agreement on Tariffs and Trade (GATT) is a multilateral trade agreement that was signed in 1947 in Geneva, Switzerland. GATT is considered to be one of the most significant international trade agreements in history, as it helped to establish a framework for trade that has since been used as a model for other agreements.
GATT was created with the goal of promoting international trade and reducing trade barriers between countries. The agreement was based on a set of principles that were designed to promote free trade, including the elimination of tariffs and other barriers to trade, the reduction of government subsidies, and the establishment of fair trade practices.
One of the key features of GATT was the Most-Favored Nation (MFN) principle. This principle requires that any trade agreement between two countries must be extended to all other countries that are members of GATT. This means that if two countries agree to lower their tariffs on a particular product, they must extend that same tariff reduction to all other GATT members.
GATT was amended several times over the years, with the most significant amendment being the creation of the World Trade Organization (WTO) in 1995. The WTO took over many of the functions of GATT, and its mandate was expanded to include not just trade in goods, but also services and intellectual property.
Today, the WTO continues to promote free trade and the reduction of trade barriers between its member countries. However, the organization has faced criticism from some quarters for favoring the interests of developed countries over those of developing nations.
Despite its flaws, GATT and the WTO have played a significant role in promoting international trade and economic growth. The principles of free trade and the reduction of trade barriers have become widely accepted, and many countries now participate in a global economy that is more interconnected than ever before.