A Brief Insight Into The General Agreement On Tariff And Trade
The General Agreement on Tariff and Trade was a treaty derived to improve the international trade by lowering the tariffs imposed on trade and reduce subsidies while upholding the significant regulations.
It was formed after the end of World War II. It was made law after twenty three countries signed the agreement on January 1, 1948. It came into effect on June 30, 1948.
Over the next two decades, there were many changes that were made in GATT agreement and the number of member countries increased to 123 countries, which lead to the creation of world trade organization on January 1, 1995.
The main purpose of the General Agreement on Tariff and Trade was to eradicate the import barriers that had led to the decline of trade to about sixty five per cent of what it used to be originally, during the time of the great depression.
By eliminating the imposed tariffs, trade was promoted on a global level and economic health was restored internationally finally.
Each member nation was to treat the other nations on an equal basis when it came to impose tariffs, without showing favor to any one nation.
However, if the tariff caused serious consequences to the domestic producers, then special tariffs could be imposed on the members of the British Commonwealth.
There were restrictions imposed on the number of exports and imports done by a member nation. The exceptions were applied on:
A surplus of agricultural products
Manage the balance of payments when FX Reserves are low
Protection of the emerging industries from the negative impact of excess import
Ari Afilalo is a law professor, an author and a researcher who has closely studied the relationship between the State affairs and the International Trade. His book “The New Global Trading Order: The Evolving State And The Future Of Trade” focuses on the International Business Transactions, Trade Law and European Union Law.