Professional Documents
Culture Documents
GATT
GATT
GATT
The General Agreement on Tariffs and Trade (GATT) was a free trade agreement between 23
countries that eliminated tariffs and increased international trade.1 As the first
worldwide multilateral free trade agreement, GATT governed a significant portion of
international trade between January 1, 1948 and January 1, 1995. 2 The agreement ended when it
was replaced by the more robust World Trade Organization (WTO).
Purpose
The purpose of GATT was to eliminate harmful trade protectionism. That had sent global trade
down 66% during the Great Depression.4 GATT restored economic health to the world after the
devastation of the Depression and World War II.
Three Provisions
GATT had three main provisions. The most important requirement was that each member must
confer most favored nation status to every other member. All members must be treated equally
when it comes to tariffs. It excluded the special tariffs among members of the British
Commonwealth and customs unions. It permitted tariffs if their removal would cause serious
injury to domestic producers.
Second, GATT prohibited restrictions on the number of imports and exports. The exceptions
were:
When a government had a surplus of agricultural products
If a country needed to protect its balance of payments because its foreign exchange
reserves were low
Emerging market countries that needed to protect fledgling industries
Member Countries
The original 23 GATT members were Australia; Belgium; Brazil; Burma, (now called
Myanmar); Canada; Ceylon, now Sri Lanka; Chile; China; Cuba; Czechoslovakia, now Czech
Republic and Slovakia; France; India; Lebanon; Luxembourg; Netherlands; New Zealand;
Norway; Pakistan; Southern Rhodesia, now Zimbabwe; Syria; South Africa; the United
Kingdom and the United States. The membership increased to more than 128 countries by 1994.