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General Agreement on Tariffs And Trade

The General Agreement on Tariffs and Trade (GATT) was first signed in
1947. The agreement was designed to provide an international forum that
encouraged free trade between member states by regulating and reducing
tariffs on traded goods and by providing a common mechanism for resolving
trade disputes. GATT membership now includes more than 110 countries.

Consideration of GATT's relationship to environmental policy is an emerging concern in

trade and environmental policy circles. Until the recently concluded Uruguay Round of
GATT negotiations, the word environment did not appear in the GATT text. Several
provisions and sections of GATT may be relevant to environmental issues, however. The
following sections of GATT are often referenced in the examination of trade-
environment issues. The excerpts are from GATT as amended through 1966, originally
digitized by the Multilaterals Project of the Fletcher School of Law and Diplomacy, Tufts

Background: the two GATTs

The original General Agreement on Tariffs and Trade, now referred to as GATT 1947,
provided the basic rules of the multilateral trading system from 1 January 1948 until the
World Trade Organization entered into force on 1 January 1995. These rules, which dealt
only with trade in goods, were supplemented and modified by many further legal
instruments adopted over the 47 years between 1948 and 1995, as a result of multilateral
negotiations, protocols of accession, waivers and other decisions. Articles of GATT 1947
dealing with such matters as accession, joint action by the Contracting Parties (the
signatories of the agreement) and consultations and complaints allowed the GATT to
function effectively as an international organization. A further important feature of
GATT 1947, however, was its "grandfather clause", included in the Protocol of
Provisional Application. This provided that the rules in Part III of the GATT 1947, which
essentially dealt with non-tariff trade measures, need be applied only to the extent that
they were not inconsistent with legislation in effect when a country acceded to the
GATT. GATT 1947 is no longer in force.

GATT 1994, which sets out the main WTO rules that bear specifically on trade in goods,
is legally distinct from GATT 1947. Many of its key elements, including post-1948 legal
instruments, have been carried over without change from GATT 1947. Examples are the
most-favoured-nation rule (Article I of both GATT 1947 and GATT 1994) and the
provisions of Part IV, on trade and development. Other Articles carried over into GATT
1994 have effectively been modified, sometimes substantially, by individual agreements
negotiated in the Uruguay Round. Some Articles are no longer valid, having been
replaced by provisions of the WTO Agreement. The Protocol of Provisional Application
is specifically excluded from GATT 1994. The GATT 1994 is defined by a short
Uruguay Round agreement entitled "General Agreement on Tariffs and Trade 1994".
This does not provide a new physical text for GATT 1994, but indicates the relationship
between it and GATT 1947.

GATT 1994

The Marrakesh Agreement Establishing the World Trade Organization states that the
General Agreement on Tariffs and Trade 1994 (GATT 1994) is an instrument legally
distinct from the General Agreement on Tariffs and Trade dated 30 October 1947,
annexed to the Final Act of the United Nations Conference on Trade and Employment
(Havana Conference), and referred to as GATT 1947.

The GATT 1994, as set out in Annex 1A to the WTO Agreement, consists of: (a) the
provisions of GATT 1947; (b) the provisions of legal instruments which entered into
force under GATT 1947 before the date of entry into force of the WTO Agreement; (c)
the Understandings on the interpretation of a number of GATT Articles, adopted at the
end of the Uruguay Round; and (d) the Marrakesh Protocol to GATT 1994.

The General Agreement on Trade on Services (GATS) extends the rules based multilateral
trading system to the wide area of services. Similar advantages should accrue to developing
countries from the operation of a rules based system in services as has been the case for
merchandise trade. While many developing countries are not presently well placed to take
advantage of some of the improved market access opportunities which the Agreement will
provide, they will be in a position to do so in the future as their domestic supply capacity
increases. However, a number of areas of export interest to developing countries (for example
the movement of natural persons) have already been committed to liberalization by major
importing countries or are the subject of ongoing negotiations to improve market access.
Further, the GATS is unique in that it permits Member countries, including developing
countries, to negotiate the conditions under which foreign services suppliers may establish in
their countries. These terms and conditions are bound in the schedules of the Members
concerned. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
offers potential benefits for developing countries by creating a framework which is conducive
to technology transfer and foreign direct investment. Its main disciplines include non-
discrimination (i.e. most-favoured-nation and national treatment) and the equal application by
all Members of minimum standards of protection in relation to all categories of intellectual
property rights.