GATT

(General Agreement on Tariffs and Trade)

Introduction

• GATT was a multilateral international agreement designed to promote international trade by reducing tariffs and other trade barriers. It was created in the post–World War II period to stabilize the global economy and prevent protectionist trade practices.

Origin and Establishment

• Signed by 23 countries at Geneva on 30 October 1947
• Came into force on 1 January 1948
• Functioned as a temporary arrangement, but remained effective for nearly five decades
• Operated through a series of trade negotiation rounds

Objectives of GATT

• To promote free and fair international trade
• To reduce customs duties (tariffs) and quantitative restrictions
• To eliminate discriminatory trade practices
• To ensure economic cooperation among nations
• To raise standards of living and employment

Key Principles of GATT

1. Most Favoured Nation (MFN): Any trade advantage given to one member must be extended to all members.
2. National Treatment: Imported goods should be treated the same as domestic goods after entering the market.
3. Tariff Reduction: Progressive reduction of customs duties through negotiations.
4. Reciprocity: Mutual exchange of trade concessions between countries.
5. Transparency: Clear and predictable trade rules.

GATT Negotiation Rounds

• Several rounds were held to expand trade rules.
• The Uruguay Round (1986–1994) was the most important.
• This round:
  • Expanded trade rules to services, agriculture, textiles, and intellectual property
  • Led to the creation of the World Trade Organization (WTO)

Role of GATT in Intellectual Property Rights

• Initially, GATT did not cover IPR.
• Growing issues of counterfeiting and piracy led to inclusion of IPR in trade talks.
• During the Uruguay Round, IPR became a major agenda.
• Resulted in the TRIPs Agreement, linking IPR protection with international trade.

End of GATT

• GATT officially ended in 1994.
• It was replaced by the WTO on 1 January 1995.
• However, GATT 1994 continues to operate under the WTO framework.

Importance of GATT

• Laid the foundation of the modern global trading system
• Promoted economic cooperation among nations
• Reduced trade barriers worldwide
• Played a key role in the global recognition of IPR

Exam Points

• GATT signed: 1947 (Geneva)
• Enforced: 1948
• Members at start: 23 countries
• Replaced by: WTO (1995)
• IPR included during: Uruguay Round

2. World Trade Organization (WTO)

Introduction

• The World Trade Organization (WTO) is a permanent international organization that regulates and facilitates global trade among nations. It provides a legal and institutional framework for international trade relations and ensures that trade flows smoothly, predictably, and freely.

Establishment

• Established on 1 January 1995
• Formed as an outcome of the Uruguay Round (1986–1994) of GATT
• Headquartered in Geneva, Switzerland
• WTO is the successor to GATT, though GATT 1994 continues under WTO

Objectives of WTO

• To promote free and fair international trade
• To raise standards of living and employment
• To ensure optimal use of world resources
• To support sustainable development
• To integrate developing countries into the global trading system

Scope of WTO Agreements

WTO covers three major areas of trade:

1. Trade in Goods – governed by GATT
2. Trade in Services – governed by GATS
3. Trade-Related Aspects of Intellectual Property Rights – governed by TRIPs

Functions of WTO

• Administers and implements multilateral trade agreements
• Acts as a forum for trade negotiations
• Settles international trade disputes through a Dispute Settlement Mechanism (DSM)
• Reviews national trade policies
• Provides technical assistance and training to developing countries

WTO and Intellectual Property Rights

• WTO brought IPR under the global trade framework
• Through the TRIPs Agreement, WTO:
  • Sets minimum standards of IPR protection
  • Makes IPR compliance mandatory for member countries
  • Allows trade sanctions for non-compliance
• Strengthened global enforcement of patents, copyrights, trademarks, etc.

Structure of WTO

• Ministerial Conference – highest decision-making body
• General Council – day-to-day operations
• Councils for: Trade in Goods, Trade in Services. TRIPs

Difference Between GATT and WTO

• GATT was a temporary agreement, WTO is a permanent organization
• GATT dealt mainly with trade in goods
• WTO covers goods, services, and IPR
• WTO has a strong dispute settlement system

Importance of WTO

• Promotes stability and transparency in international trade
• Protects the interests of smaller and developing countries
• Encourages globalization and economic growth
• Strengthens international IPR enforcement

Exam Points

• WTO established: 1995
• Headquarters: Geneva
• WTO replaced: GATT
• IPR agreement under WTO: TRIPs
• WTO agreements are legally binding