INTERNATIONAL FINANCE

Sr. No. Name Roll No.

1 Ms. Ekta Patel 28
2 Mr. Tilakraj Poojary 33
3 Mr. Sachin Satyavrathan 35
4 Mr. Deep Shah 37
5 Mr. Ravi Sharma 40
6 Mr. Chintan Shingala 42
Submitted To: Prof. Indrayani Dixit
GATT (General Agreement
on Tariffs and Trade )
1948-1994
The General Agreement on Tariffs and Trade
(GATT) was first signed in 1947.

Outcome of the failure of negotiating governments to create the ITO
(International Trade Organization)
The Bretton Woods Conference introduced the idea for an organization to
regulate trade as part of a larger plan for economic recovery after World War II
As governments negotiated the ITO, 15 negotiating states began parallel
negotiations for the GATT as a way to attain early tariff reductions
The ITO failed in 1950, only the GATT agreement was left.

Inception
Precursor organization to GATT, ITO, was first proposed in February 1945 by the United
Nations Economic and Social Council (UNESCO).
Owing to the United States failing to implement the ITO, GATT was the only
organization left.
On 1 January, 1948 the agreement was signed by 23 countries: Australia, Belgium,
Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, the Czechoslovak Republic, France,
India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern
Rhodesia, Syria, South Africa, the United Kingdom, and the United States.
According to GATT's own estimates, the negotiations created 123 agreements that
covered 45,000 tariff items that related to approximately one-half of world trade or $10
billion in trade.

Objectives of GATT
By reducing tariff barriers and eliminating discrimination in international trade, the GATT aims at:
1. Expansion of international trade;
2. Increase of world production by ensuring full employment in the participating nations;
3. Development and full utilisation of world resources; and
4. Raising standard of living of the world community as a whole.
However, the articles of the GATT do not provide directives for attaining these objectives. These are to be indirectly achieved by
the GATT through the promotion of free (unrestricted) and multilateral international trade.
As such, the rules adopted by GATT are based on the following fundamental principles:
1. Trade should be conducted in a non-discriminatory way;
2. The use of quantitative restrictions should be condemned; and
3. Disagreements should be resolved through consultations.
In short, members of GATT agree to reduce trade barriers and to eliminate discrimination in international trade so that, multilateral
and free trade may be promoted, leading to wider dimensions of world trade and prosperity.

GATT Member Countries
On 1 January 1995, the WTO replaced GATT, which had been in existence since 1947, as the organization overseeing the
multilateral trading system. The governments that had signed GATT were officially known as GATT contracting parties. Upon
signing the new WTO agreements (which include the updated GATT, known as GATT 1994), they officially became as WTO
members.
The 128 countries that had signed GATT by 1994
Angola 8 April 1994
Antigua and Barbuda 30 March 1987
Argentina 11 October 1967
Australia 1 January 1948
Austria 19 October 1951
Bahrain 13 December 1993
Bangladesh 16 December 1972
Barbados 15 February 1967
Belgium 1 January 1948
Belize 7 October 1983
Benin 12 September 1963
Bolivia 8 September 1990
Botswana 28 August 1987
Brazil 30 July 1948
Brunei Darussalam 9 December 1993
Burkina Faso 3 May 1963
Burundi 13 March 1965
Cameroon 3 May 1963
Canada 1 January 1948
Central African Republic 3 May 1963
Chad 12 July 1963
Chile 16 March 1949
Colombia 3 October 1981
Congo, Republic of 3 May 1963
Costa Rica 24 November 1990
Cte d'Ivoire 31 December 1963
Indonesia 24 February 1950
Ireland 22 December 1967
Israel 5 July 1962
Italy 30 May 1950
Jamaica 31 December 1963
Japan 10 September 1955
Cuba 1 January 1948
Cyprus 15 July 1963
Czech Republic 15 April 1993
Denmark 28 May 1950
Djibouti 16 December 1994
Dominica 20 April 1993
Dominican Republic 19 May 1950
Egypt 9 May 1970
El Salvador 22 May 1991
Fiji 16 November 1993
Finland 25 May 1950
France 1 January 1948
Gabon 3 May 1963
The Gambia 22 February 1965
Germany 1 October 1951
Ghana 17 October 1957
Greece 1 March 1950
Grenada 9 February 1994
Guatemala 10 October 1991
Guinea 8 December 1994
Guinea Bissau 17 March 1994
Guyana 5 July 1966
Haiti 1 January 1950
Honduras 10 April 1994
Hong Kong 23 April 1986
Hungary 9 September 1973
Iceland 21 April 1968
India 8 July 1948
Success of GATT
Continual reductions in tariffs alone helped spur very high rates of
world trade growth during the 1950s and 1960s around 8% a year
on average.
And the momentum of trade liberalization helped ensure that trade
growth consistently out-paced production growth throughout the
GATT era
The rush of new members during the Uruguay Round demonstrated
that the multilateral trading system was recognized as an anchor for
development and an instrument of economic and trade reform.

BUT
Every country started protecting their home industry.
High rates of unemployment and constant factory closures led
governments in Western Europe and North America to seek bilateral
market-sharing arrangements with competitors and to embark on a
subsidies race to maintain their holds on agricultural trade

Both these changes undermined GATTs credibility and effectiveness.

The problem was not just a deteriorating trade policy environment.
By the early 1980s the General Agreement was clearly no longer as relevant to
the realities of world trade as it had been in the 1940s
World trade had become far more complex and important than 40 years before
The globalization of the world economy was underway
Trade in services not covered by GATT rules

Factors convinced GATT members that a new effort to reinforce and
extend the multilateral system should be attempted.
That effort resulted in the Uruguay Round, and the creation of the
WTO in 1995