As today’s business environment shifts in favor of globalization, understanding the rules and regulations that navigate international trade is critical. The General Agreement on Tariffs and Trade (GATT) is a core document issued by the World Trade Organization which creates the framework for global commerce.
History of GATT and its Evolution
GATT was a major factor in shaping international trade following World War II. Signed in 1947 by 23 countries, it established global rules regarding tariffs and the non-discrimination of commerce between countries. This agreement underwent a major overhaul and was replaced with the World Trade Organization (WTO) in 1995 which significantly expanded its application.
How Does GATT Affect Business Today?
One of the primary objectives of GATT was to reduce tariffs and other barriers which impede the flow of international trade. In order to promote free trade, the agreement requires that countries cannot charge higher tariffs on goods imported from other member countries. This helps to open markets and promote more competition both domestically and internationally.
Another major benefit of the agreement is the protection of intellectual property rights. There is an increasing trend of countries attempting to pass laws which protect their domestic markets while simultaneously preventing foreign competition. GATT requires countries to adhere to their international obligations to protect intellectual property, thus protecting companies from unfair competition.
The Future of GATT
GATT has proven to be an integral factor in the success of the global economy. As the dynamics of world trade evolve, the agreement will need to adapt and adjust in order to remain relevant. Additionally, many developing countries are looking towards GATT to help ensure fair trade and to promote economic stability.
GATT has served as the cornerstone of international trade for over half a century, and its future looks bright. As technological and demographic changes shape the future of the global economy, GATT will remain a pivotal factor for businesses as they navigate the ever-evolving landscape of international commerce.