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International Trade

International Trade

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Published by: vinothkumararaja8249 on Jul 12, 2010
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1. Trade without discrimination: Trade must be conducted on the basis of non-

discrimination. All contracting parties are bound to grant to each other treatment

as favourable as they would to any country (most favoured nation) in the

application and administration of import and export duties and charges.

Expectations to this basic rule are allowed only in the case of regional trading

arrangements and the developing countries.

2. Protection only through tariff: Protection should be given to domestic

industries only through customs tariffs and not through other commercial

measures. The aim of this rule is to make the extent of protection clear and to

Make competition possible. Exception is, however, made in the case of

developing countries where the demand for imports by development may require

them to maintain quantitative restrictions in order to prevent an excessive drain on

their foreign exchange resources.

3. A Stable basis of trade: The binding of the tariff levels negotiated among the

contracting countries provides a stable predictable basis for trade. Binding of

tariffs means that these cannot be increased unilaterally. Although provision is

made for the renegotiation of bound tariffs, a return tariffs is discouraged by the

requirement that any increase be compensated for.

4. Consultation: A basic principle of GATT is that member-countries should

consult one another on trade matters and problems. They can call on GATT for a

fair settlement of cases in which they feel that their rights under the GATT are

being withheld or compromised by other members.

The agreement consists of four parts:

Part I: Main obligations of the contracting parties;

Part II: A code of fait trade practices to guide members in their commercial policies;

Part III: Conditions for membership and withdrawal; and

Part IV: Expansion of trade of developing countries through special concessions.

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