General Agreement

on Tariffs and Trade

History
The General Agreement on Tariffs and Trade
(GATT) was first signed in 1947.
To provide an international forum
That encouraged free trade between member
states
By regulating and reducing tariffs on traded
goods
Providing a common mechanism for resolving
trade disputes.

History
The General Agreement on Tariffs and Trade
(GATT) is A Treaty, not an Organization
Was the 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
Once the ITO failed in 1950, only the GATT agreement was
left.

Objective
The GATT's main objective was the
Reduction of Barriers to International Trade
This was achieved through the Reduction of
Tariff barriers
Quantitative Restrictions
Subsidies on trade through a series of agreements

Objective

The primary objectives of GATT was to

expand international trade by liberalizing so
as to bring about all round economic
prosperity, the important objective are as
follows as:Raising standards of living.
Ensuring full employment and large and
steady growing volume of real income and
effective demand.
Developing full use of resources of the world.
Expansion of production and international
trade.

Functions
National Treatment
Protection through tariff.
Dispute Settlement.
Trade Negotiation among Developing
Countries.

Progression
Increased world trade growth 1950s and 1960s
around 8% a year on average
With Trade growth, production growth was also
witnessed.
Recognition of multilateral trading system as the
anchor for development and an instrument of
economic and trade reform.

Outcomes
Protectionism:
Every country started protecting their home industry.
Unemployement:
High rates of unemployment and constant factory
closures led governments in Western Europe and
North America.
Other Factors:
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
Ever increasing international investments

Rise of WTO
Factors such as Unemployment, Crisis,
Ineffective Trade Laws, Poverty convinced
GATT members that a new effort to reinforce
and extend the multilateral system should be
attempted.
That effort resulted in the Uruguay Round,
the Marrakesh Declaration, and the creation
of the WTO.

Uruguay Round
1986-1994 |123 countries participated |
Chaired by Arthur Dunkel
The last and largest round of GATT which led
the foundation of GLOBAL VILLAGE
It involved trade of GOODS,
SERVICES,TECNOLOGY and TRIPs
Agriculture was the key concern of round
It was scheduled to be completed in 1990
which did not happened due to lack of
agreement between participating nations in
areas such as patents, maritime and
agriculture.

Uruguay Round
Initially it seemed that the purpose of round will fail but
at the end it brought the biggest reform in the worlds
trading system.
As the negotiation dragged on the DG of GATT Arthur
Dunkel ,gave a draft in December 1991 for solving the
problem of deadlock popularly known as Dunkel Draft.
The round was finalized on 15 April 1994 and was
signed by 117 nations out of 123.

GATT & India

India was one of the 23 founding Contracting
Parties to the General Agreement on Tariffs
and Trade (GATT) that was concluded in
October 1947.
India has often led groups of less developed
countries in subsequent rounds of Multilateral
Trade Negotiations (MTNs) under the auspices
of the GATT.

GATT & Indian Pharma Industry

It was only after the GATT Trade Rounds that
Indian Drugs Industry was allowed to patent its
product.
But the price of the patent was very expensive.
GATT strengthened India's Pharma Sector.
Improved Research Base.

GATT & Indian Agriculture

Sector

The main objective of the GATT Treaty is to reform

world trade.
GATT and Indian Agri sector is divided into 3 main
phases
Market Access.
Domestic Support.
Export Competition.

GATT & India

Market Access.
In this all the GATT members were replace all the Trade
Barriers and to allow Indian Supplies into their country.
Tariffs reduced by 24% to 36%.
Domestic Support.
Develop countries also supported India to grow their
Domestic Consumption.
India has a big Domestic Market.
Export Competition.
Indian Agriculture industry has always been strong.
India used to Export to many developing and under
developed countries.
India only had competition when it comes to Sales in
Developed Countries

GATT & India

Market Access.
In this all the GATT members were replace all the Trade
Barriers and to allow Indian Supplies into their country.
Tariffs reduced by 24% to 36%.
Domestic Support.
Develop countries also supported India to grow their
Domestic Consumption.
India has a big Domestic Market.
Export Competition.
Indian Agriculture industry has always been strong.
India used to Export to many developing and under
developed countries.
India only had competition when it comes to Sales in
Developed Countries

GATT

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