Arcillo, Camille Jane
Mizona, Melanie Joie Lynne
What is General Agreement on Tariffs and
Trade or (GATT)?
 The General Agreement on Tariffs and
Trade was a free trade agreement between
23 countries that eliminated tariffs and
increased international trade. It was the
first worldwide multilateral free trade
agreement. It was in effect from January 1,
1948 until January 1, 1995.
 The General Agreement on Tariffs and
Trade is a multilateral trade agreement
aimed at expanding international trade and
the organization that oversees the
agreement.
Founder
 Australia, Belgium, Brazil, Burma,
Canada, Ceylon, Chile, China, Cuba,
Czechoslovakia, France, India, Lebanon,
Luxembourg, Netherlands, New
Zealand, Norway, Pakistan, Southern
Rhodesia, Syria, South Africa, United
Kingdom and the United States.
 It was signed by 23 nations in Geneva
on 30 October 1947, and took effect on
1 January 1948. It remained in effect
until the signature by 123 nations in
Marrakesh on 14 April 1994, of the
Uruguay Round Agreements which
established the World Trade
Organization (WTO) on 1 January 1995
Purpose
 The purpose of GATT was to eliminate
harmful trade protectionism. That had sent
global trade down 65 percent during the
Great Depression. GATT restored
economic health to the world after the
devastation of the depression and World
War II.
 The main role of GATT in the
international trade was regulating the
contracting parties to achieve the purpose
of the agreement which were reducing
tariffs and other barriers, and to achieve
the liberalization in international trade.
Contemporary World
Report
Provisions
 GATT had three main provisions. The
most important requirement was that
each member must confer most favored
nation status to every other member. All
members must be treated equally when it
comes to tariffs. It excluded the special
tariffs among members of the British
Commonwealth and customs unions. It
permitted tariffs if their removal would
cause serious injury to domestic producers.
 Second, GATT prohibited restriction on
the number of imports and exports. The
exceptions were:
o When a government had a
surplus of agricultural products.
o If a country needed to protect its
balance of payments because its
foreign exchange reserves were
low.
o Emerging market countries that
needed to protect fledgling
industries.
 The third provision was added in 1965.
That was because more developing
countries joined GATT, and it wished to
promote them. Developed countries agreed
to eliminate tariffs on imports of
developing countries to boost their
economies. It was also in the stronger
countries' best interests in the long run. It
would increase the number of middle-class
consumers throughout the world.
 In addition, countries could restrict trade
for reasons of national security. These
included protecting patents, copyrights,
and public morals.
Effect in the Philippines
 Reduction in taxes on imports
 Removal of import restrictions on
agricultural products
 Stricter standards on intellectual property
rights