GENERAL AGREEMENT ON

TARIFFS AND TRADE SHORT NOTE

The General Agreement on Tariffs and Trade (GATT), established in 1947, was a
foundational international trade agreement that aimed to promote global economic
cooperation and reduce trade barriers. GATT served as the precursor to the World Trade
Organization (WTO) and laid the groundwork for modern international trade practices.

GATT's key objectives included the reduction of tariffs and trade barriers among member
countries, fostering fair and nondiscriminatory trade practices. Its most-favored-nation
(MFN) principle ensured that any trade advantage offered to one country would be extended
to all members, preventing preferential treatment.

Negotiations under various "rounds" sought to lower tariffs on specific goods and address
emerging trade issues. Notable rounds include the Kennedy Round and the Uruguay Round.
GATT's achievements led to substantial reductions in tariffs, bolstering global trade volumes
and economic growth.

Despite its successes, GATT faced limitations. It lacked a formal dispute settlement
mechanism and covered only trade in goods, not services or intellectual property. These
shortcomings led to the creation of the WTO in 1995, which built upon GATT's principles
and expanded its scope.

In summary, GATT played a pivotal role in shaping the post-World War II global trade
landscape. By advocating for tariff reductions, nondiscrimination, and negotiation-based
solutions, GATT set the stage for the establishment of the WTO and its broader, more
comprehensive approach to international trade regulation.
 WTO SHORT NOTE
The World Trade Organization (WTO), established in 1995, is a global international
organization that oversees and regulates international trade. It succeeded the General
Agreement on Tariffs and Trade (GATT) and operates as a platform for member countries to
negotiate trade agreements, settle disputes, and promote fair and open trade practices.

The WTO's core objectives include reducing trade barriers, ensuring non-discrimination
between member countries, and providing a framework for resolving trade disputes. It
functions through regular trade negotiations, where member countries work to lower tariffs
and non-tariff barriers, promoting trade liberalization. The organization's dispute settlement
mechanism offers a structured way to address trade conflicts, discouraging unilateral
retaliations.

Transparency, predictability, and stability are upheld through the WTO's rules-based system.
Member countries must adhere to the principles of non-discrimination, national treatment,
and reciprocity. The WTO monitors global trade policies, provides technical assistance to
developing nations, and addresses issues such as intellectual property rights and trade-
environment linkages.

In a rapidly changing global economy, the WTO faces challenges in adapting to new trade
realities and resolving conflicts arising from differing interests. However, its role in fostering
international cooperation, promoting economic growth, and preventing trade conflicts
remains pivotal.