The General Agreement on Tariffs and Trade (GATT) of 1994 is a multilateral agreement that regulates international trade. It was signed by 123 nations and entered into force on January 1, 1995. The GATT agreement created the World Trade Organization (WTO) and replaced the original GATT agreement that was signed in 1947. The aim of this agreement was to liberalize and facilitate international trade among member countries.
The GATT agreement of 1994 covers many aspects of international trade, including agriculture, textiles, intellectual property, and services. The agreement set out rules for the conduct of international trade, such as the principle of non-discrimination, which states that countries cannot discriminate between their trading partners. This means that countries must treat imported and domestically produced goods equally.
The GATT agreement also established the Most Favored Nation (MFN) principle, which requires countries to treat all other member countries equally. This means that if a country offers special treatment to one of its trading partners, it must also extend that treatment to all other members. The MFN principle is essential for promoting fair and equal trade among member countries.
One of the significant achievements of the GATT agreement was the reduction of tariffs and other trade barriers. Tariffs are taxes imposed on imported goods to protect domestic industries from foreign competition. The GATT agreement aimed to reduce these tariffs gradually. As a result, many countries have significantly lowered their tariffs, leading to increased international trade and the growth of global economies.
Another important aspect of the GATT agreement was the establishment of the Dispute Settlement Understanding (DSU). The DSU is a mechanism that allows member countries to resolve disputes related to trade issues. The DSU provides a rules-based system for settling disputes, which helps prevent trade wars between member countries.
In conclusion, the GATT agreement of 1994 is a crucial agreement that has promoted fair and equitable trade among member countries. It has helped to reduce trade barriers and increase international trade, leading to economic growth and development. The agreement`s principles of non-discrimination and MFN have ensured that member countries trade with each other on an equal and fair basis. The establishment of the DSU has also helped prevent disputes between countries, contributing to the stability of the global economy.