GATT (General Agreement Tariffs and Trade is, or General Agreement on Tariffs and Trade)
International trade had suffered much from the Second World War. The use of protectionism has led to a dramatic drop in international transactions. It felt that the time was right to give a new impetus to the freeing of all protectionist barriers, returning to a pro-competitive practice, and facilitating its expansion.
Thus, the GATT (General Agreement Tariffs and it later) or General Agreement on Tariffs and Trade was born in 1947. This agreement was signed by 23 States representing 80% of international trade. After the Second World War, numerous contracts took place between nations, to establish a new basis for economic, monetary and commercial use, and to consider the establishment of a charter or agreement.
The objectives and principles of the GATT was to:
remove all barriers to trade and the return to free trade, with the liberalization of all protectionist barriers, tariffs and NTBs. The abolition of all anti-competitive practices such as export subsidies, dumping, quantitative restrictions and tariffs. The development of negotiations between the contracting parties and the enforcement of trade agreements alongwith the
arbitration of disputes between countries.
The basic principle of the agreement includes two clauses.The provision of the most favored nation: which states that countries granting trade benefits to another shall extend to all other nations. the obligation to apply this principle that is not limited to customs duties, it also relates to:
the charges of any kind applied to the import or export.
The rules and formalities connected with importation and exportation. And the taxes and charges imposed on goods imported and the laws, regulations and other requirements affecting the sale of these goods and the mode of application of customs duties and other charges.
The national treatment clause, is a rule that states that an imported product that has crossed the border after payment of customs duties and other charges is not subject to treatment less favorable than those applied to the domestic product.
The principle of gradual and general lowering of tariffs is one of the fundamental rule of GATT. In this, the tariffs and other measures that countries use to protect their domestic production are reduced and as far as possible removed through negotiations among the member countries, and that such reduced duties are consolidated, that is to say that countries do not undertake to meet later.
To gradually reduce tariffs on reciprocal basis, three techniques are used:
Negotiating product by product; The linear cut; The harmonization of tariffs in the various states.
Tags: GATT (General Agreement on Tariffs and Trade); principles; objectives of GATT
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