Write A Detailed Note On General Agreement On Tariff And Trade

Another common situation requires an exception to GATT and WTO rules. Many countries have decided to adopt several paths towards trade liberalization. The multilateral approach describes the GATT process in which many countries simultaneously reduce their trade barriers, but not to zero. The alternative approach is called regionalism, where two to several countries agree to reduce their tariffs and other obstacles to zero – but only between them. This is called a regional approach because free trade partners are mostly close or at least important trading partners (although this is not always the case). There is a second form of promise made by the GATT countries, which is harmonized. These promises include the acceptance of certain principles of conduct in international trade policy. Again, there are two types of promises: the first concerns the fundamental principles of non-discrimination and the second includes permissible exceptions to these principles. The details of GATT have been optimized in the decades since its creation. The main objective of the continuation of the negotiations was to further reduce tariffs. In the mid-1960s, an anti-dumping agreement was added with the Kennedy Round, while the Tokyo Round improved other aspects of trade in the 70s. The Uruguay Round lasted from 1986 to 1994 and created the World Trade Organization. Under GATT, Member States meet at regular intervals to negotiate agreements to reduce quotas, tariffs and other restrictions on international trade.

GATT is by nature a contractual arrangement between parties (or nations). It is a treaty administered jointly by the States parties. 2. This creates uncertainty and instability in the customs structure of individual countries. In the end, this resulted in an average reduction of 35 per cent in tariffs, excluding textiles, chemicals, steel and other sensitive products; plus a 15% to 18% reduction in tariffs on agricultural and food products. In addition, the negotiations on chemicals resulted in a provisional agreement on the abolition of the US selling price (PPP). It was a method of valuation of certain chemicals used by these countries to impose import duties, which gave domestic producers a much higher level of protection than specified in the Customs Code. The third provision was added in 1965 and was addressed to developing countries that have acceded to the GATT. Developed countries have agreed to abolish tariffs on imports from developing countries in order to stimulate these economies.

Lower tariffs have also had benefits for developed countries. As gatt increased the number of middle-class consumers around the world, the demand for trade with developed countries increased. The working hypothesis for collective bargaining was a linear tariff reduction of 50% with the few exceptions. A lengthy debate was developed about the trade impact that a uniform linear reduction would have on the dispersed rates (low and high tariffs, which are quite distant) of the United States compared to the much more concentrated rates of the EEC, which also tended to be in the lower tariffs of the United States. .