General Agreement on Tariffs and Trade (GATT)
관세와 무역에 관한 일반협정 (GATT)
A multilateral trade agreement signed by 23 countries in 1947 to reduce trade barriers such as tariffs and quotas. When the plan for an International Trade Organization (ITO) collapsed because the United States would not ratify it, the tariff agreement that had been part of it served for almost half a century as a "provisional" international organisation. Through eight rounds of multilateral negotiations it helped bring average tariffs among the main participants down from about 22 percent in 1947 to 5 percent after the Uruguay Round, and in 1995 it was succeeded by the World Trade Organization.
In depth
After the Second World War the United States sought a third institution for trade alongside the IMF for money and the World Bank for reconstruction: the International Trade Organization. The ITO charter negotiated by more than 50 countries was ambitious, covering not only trade but employment, commodity agreements, restrictive business practices, international investment and services, and was to be adopted at the UN Conference on Trade and Employment in Havana in 1947–48. But the United States did not ratify it, and the ITO never came into being.
Meanwhile, in December 1945, 15 countries had begun talks to reduce and bind customs tariffs, to correct the protectionist legacy of the early 1930s. This first round produced trade rules and 45,000 tariff concessions affecting $10 billion of trade, about a fifth of the world total, and 23 countries signed the agreement in Geneva on 30 October 1947. The negotiations followed the request-and-offer procedure of the US Reciprocal Tariff Act of 1934. Under the most-favoured-nation clause, every concession reached between two countries was extended to all other participants: a tariff cut given to one was given to all.
Applied "provisionally" from 1 January 1948, GATT supplied the rules for most of world trade for 47 years, until 1994. The Annecy (1949), Torquay (1951), Geneva (1955–56) and Dillon (1960–62) rounds cut tariffs further; the Kennedy Round of 1964–67 produced an anti-dumping agreement, and the Tokyo Round of 1973–79 agreements on barriers other than tariffs. "Special and differential treatment" provisions exempted developing countries from the strictest rules. Agriculture, however, was essentially exempt in import quotas and export subsidies.
In practice GATT decided by consensus, members had many exceptions when its rules conflicted with legitimate domestic objectives, and they could block dispute settlement; members were wary of delegating too much power to an international organisation. This looseness matched the "embedded liberalism" of the Bretton Woods order, the compromise that pursued free trade together with domestic employment and welfare policy. The Uruguay Round of 1986–94 extended the rules to services, intellectual property and agriculture, and its outcome was the World Trade Organization, launched on 1 January 1995.