PRESENTED BY

VIJAYA GAUTAM
PRITI BISHT
MUNIJI KUMAR
SAURABH NAGPAL
SHALINI
GATT:
The General Agreement on Tariffs and Trade (GATT) was
first signed in 1947.
WHAT DOES GATT MEAN:
It is an agreement between States aiming at eliminating
discrimination and
reducing tariffs and other trade barriers with respect to trade
in goods.
GATT is a multilateral trade agreement with the authority to
regulate the trade regulations of its member governments. As an
international treaty, it has no authority over individuals, private
firms, or public corporation. Rather, it governs the interactions of
countries that voluntarily agree to abide by its rules.
 History
Divided into 3 phases:
First:
From 1947 until the Torquay Round
Largely concerned which commodities would be covered by
the agreement
Freezing existing tariff levels
Second:
From 1959 to 1979
Focused on reducing tariffs
Third:
Consists only of the Uruguay Round from 1986 to 1994
It extended the agreement to new areas such as intellectual
property, services, capital, and agriculture
Final outcome was creation of WTO
 First Phase
 Commodities which would be covered by the agreement
and freezing existing tariff levels
Year Place/name Subjects covered

1947 Geneva Tariffs

1949 Annecy Tariffs

1951 Torquay Tariffs

 Second Phase
Focused on reducing tariffs
Year Place/name Subjects covered

1960-1961 Geneva Tariffs

Dillon Round

1964-1967 Geneva Tariffs and anti-dumping

Kennedy Round measures

1973-1979 Geneva Tariffs, non-tariff measures,

Tokyo Round “framework”
agreements
 Third Phase
Extended the agreement fully to new areas such as intellectual property,
services, capital, and agriculture. Out of this round the WTO was born.

Year Place/name Subjects covered

1986-1994 Geneva Tariffs, non-tariff measures,

Uruguay Round rules, services, intellectual
property, dispute settlement,
textiles, agriculture, creation
of WTO, etc
 ROUNDS
NAME START DURA COUNT SUB. ACHIVEMENTS
TION RIES COVERED
1.GENEVA APRIL 7 23 TARIFFS SIGNING OF GATT,
MONTH 45,000 TARIFF
1947 S CONCESSIONS
AFFECTING $10
BILLION OF TRADE.

2. APRIL 5 13 TARIFFS COUNTRIES

ANNECY EXCHANGED SOME
1949 MONTH
5000 TARIFF
S
CONCESSIONS.
 ROUNDS CONT…
NAME STAR DURATION COUNTRI SUB. ACHEVEMENTS
T ES COVERED
3. TORQUAY SEPT. 8 MONTHS 38 TARIFFS COUNTRIES
1950 EXCHANGED SOME
8700 TARIFF
CONCESSIONS,
CUTTING THE TARIFFS
BY 25%

4. GENEVA II JAN. 5 MONTHS 26 TARIFFS, $2.5 BILLION IN TARIFF

1956 ADMISSION OF REDUCTION
JAPAN

5. DILLON SEPT. 11 MONTHS 26 TARIFFS TARIFF CONCESSION

1960 WORTH $4.9 BILLION
OF WORLD TRADE.
 ROUNDS CONT…
NAME STAR DURATI COUNT SUB. ACHIVEMENTS
T ON RIES COVERED
6. MAY 37 62 TARIFFS & TARIFF CONCESSION
KENNEDY 1964 MONTHS ANTIDUMPING WORTH $40 BILLION
OF WORLD TRADE

7. TOKYO SEPT. 74 102 TARIFF, NON TARIFF REDUCTION

1973 MONTHS TARIFF WORTH $190 BILLION
MEASURES, ACHIEVED.
“FRAMEWORK”
AGREEMENTS

8. SEPT. 87 123 TARIFFS,NON CREATION OF WTO, &

URUGUAY 1986 MONTHS TARIFFS,RULES, EXTENDED THE RANGE OF
SERVICES,IP,DI TRADE
SPUTE NEGOTIATION,LEADING
SETTLEMENT,TE TO THE REDUCTION IN
XTILES,AGRI. TARIFFS(ABOUT 40%).
 MARRAKESH PROTOCOL
With respect to the Marrakesh Protocol to the GATT 1994, it is
the legal instrument that incorporates the Schedules of
Concessions and Commitments on Goods negotiated under the
Uruguay Round into the GATT 1994. It confirms their
authenticity and sets out their implementation modalities.
THE PRINCIPLE OF NON-DISCRIMINATION IN
THE GATT 1994
 Non discrimination: The non-discrimination obligation
contributes to ensuring fair and predictable international trade
relations, irrespective of their origin or whether they are imported
or domestic.
 The principle of non-discrimination in international trade is two-
faceted: it consists of;
 the most-favored-nation treatment obligation and
 the national treatment obligation.
MOST-FAVORED-NATION TREATMENT OBLIGATION:
ARTICLE I:1
The objective of the MFN treatment obligation is to ensure
equality of opportunity to import from or to export to all WTO
Members.
NATIONAL TREATMENT OBLIGATION: ARTICLE III
 Article III of the GATT 1994 prohibits discrimination between
domestic and like imported products through the use of various internal
measures enumerated in Article III:1, namely,
 Internal taxes and other internal charges, and laws,
regulations and requirements affecting the internal sale,
offering for sale, purchase, transportation, distribution or
use of products, and internal quantitative regulations
requiring the mixture, processing or use of products in
specified amounts or proportions.
Terms which help understanding GATT
 Tariffs
Tariffscan be ad-Valorem, specific, or
compound.
Ad-Valorem tariff is expressed as a fixed
percentage of the value of the traded commodity.
Specific tariff is expressed as a fixed sum per
physical unit of the traded commodity.
A compound tariff is a combination of an Ad
Valorem and a specific tariff.
 Trade Restrictions /Trade
Barriers
 Import tariff
 Export tariff
 Export tariffs are prohibited by the U.S. Constitution but are often
applied by developing countries on their traditional exports
(such as Ghana on it’s cocoa and Brazil on it’s coffee) to get
better prices and revenues.
 Developing nations rely heavily on export tariff to raise revenues
because of their ease of collection.
 On the other hand, industrial countries invariably impose tariffs
or other trade restrictions to protect some(usually labor
intensive)industry, while using mostly income taxes to raise
revenues.
 NON-TARIFF BARRIERS
Import policy barriers
Standards, testing, labeling and certification
requirements
Anti-dumping & countervailing measures
Export subsidies and domestic support
Government procurement
Services barriers
Lack of adequate protection to intellectual property
rights
Other barriers
 IMPACT OF TRADE BARRIERS
The most recent round of negotiations, known as the
Uruguay Round, was completed in Dec,1993.The Uruguay
round further reduced trade barriers; extended GATT to
cover services as well as manufactured goods; provided
enhanced protection for patents, trademarks, and
copyrights; and established the World Trade Organization
(WTO)to police the international trading system.
In the late 2001, the WTO launched a new round of talks
[Doha, Qatar] aimed at further liberalizing the global trade
and investment framework.
The agenda included cutting tariffs on industrial goods,
services, and agricultural products; phasing out subsidies to
agricultural producers; reducing barriers to cross border
investments; and limiting the antidumping laws.
 COUNTER TRADE
1. Saudi Arabia agreed to buy 10 747 jets from Boeing with
payment in crude oil, discounted at 10 percent below
posted world prices.
2. GE won a contract for a $ 150 million electric generator
project in Romania by agreeing to market $150 million of
Romanian products in markets to which Romania did not
have access.
3. The Venezuelan government negotiated a contract with
Caterpillar under which Venezuela would trade 3,50,000
tons of iron ore for Caterpillar earth moving equipment.
INTERNATIONAL TRADE AND FINANCE
Trade and Balance of Payment, Dis-equilibrium in
Balance of Payment and it’s rectification.

International Monetary System: Components –

Foreign Exchange Market, International Equity
Market and Euro Currency Market.

IMF and International Monetary System: Exchange

Rate Determination ,Capital Account Convertibility.
 DID GATT
SUCCEED?
Continual reductions in tariffs helped spur very
high rates of world trade growth during the 1950s
and 1960s — around 8% a year on average
Trade growth consistently out-paced production
growth
The rush of new members during the Uruguay
Round demonstrated recognition of multilateral
trading system as the anchor for development and
an instrument of economic and trade reform.
BUT…….
GATT’s success in reducing tariffs to a low level, with a
series of economic recessions 1970-80’s drove
governments to devise other forms of protection for
sectors facing increased foreign competition
High rates of unemployment and constant factory
closures led governments in Western Europe and North
America to seek bilateral market-sharing arrangements
with competitors and to embark on a subsidies race to
maintain their holds on agricultural trade
Both these changes undermined GATT’s credibility and
effectiveness.
The problem was not just a deteriorating trade policy
environment.
By the early 1980s the General Agreement was clearly no
longer as relevant to the realities of world trade as it had
been in the 1940s
World trade had become far more complex and important
than 40 years before
The globalization of the world economy was underway
Trade in services — not covered by GATT rules
Ever increasing international investments
Factors convinced GATT members that a new effort to
reinforce and extend the multilateral system should be
attempted.

That effort resulted in the Uruguay Round, the

Marrakesh Declaration, and the creation of the
WTO.