The full form of GATT is General Agreement on Tariffs and Trade.
GATT was a legal agreement between many countries, established after World War II, designed to lower barriers to international trade. Its primary purpose was to reduce or eliminate tariffs, quotas, and other trade restrictions among member nations. While the initial focus was on tariffs (taxes on imports), it gradually addressed other trade-related issues.
Key aspects of GATT included:
- Reciprocity: Countries would lower trade barriers in exchange for similar concessions from other countries.
- Non-discrimination: Member countries were required to treat all other member countries equally (Most Favored Nation or MFN principle).
- Transparency: Trade regulations were to be publicly accessible and predictable.
After several rounds of negotiations (e.g., the Uruguay Round), GATT evolved into the World Trade Organization (WTO) in 1995. The WTO has a broader mandate and stronger enforcement mechanisms than GATT, covering not only trade in goods, but also trade in services and intellectual property. The original GATT agreement remains in effect under the WTO framework.
