Can You Define What Is Meant By GATT?

To cater to the needs of our consumer society industrialists in developed countries are fast expanding their production base. To avoid the danger of cut-throat competition or trade wars which could inflict crippling damage on their economies, they decided to become trading partners instead of rivals. They evolved a new-pattern of global trade based on cooperation rather than competition by substantially reducing or abolishing tariffs and other barriers imposed on goods and services in international markets.

The history of GATT, the aim of which is to move the world in the direction of free trade began with the first meeting of trade representatives of 23 countries taking place in Geneva in the year 1947. The final breakthrough in these epoch-making talks was achieved on December 15, 1993 when 117 countries put their seal of approval on them. The Geneva round concluded within a year to be followed by a period of hiatus lasting more than two decades during which little progress was made.

The Tokyo round which ran from 1973 to 1979 resulted in some cuts in tariffs, but the policy of giving protection to home markets was not abandoned by the negotiating countries. Problems cropped up when the economies of Japan and West Germany boomed while that of the USA was sucked into a recession. Although Americans talked of fair trade within the perimeter of free trade, they themselves did not always practice what they preached.