General Agreements on Tariffs and Trade Major Provisions of GATT: 1.Tariff: GATT obligates each country to accord nondiscriminatory, most favored nation (MFN) treatment to all other contracting parties with respect to tariffs. MFN treatment does not mean free trade or national treatment. Imports from contracting parties are subject to tariffs or quotas. MFN treatment means that no other countries with some exceptions receive better treatment or lower tariffs. Exceptions: Existing tariff preferences such as those between British Commonwealth. GATT/WTO allows the formation of customs union, which causes a significant erosion of the MFN principle. An escape clause allows any contracting party to withdraw or modify tariff concessions, if it threatens a serious injury to domestic producers. 2. Quantitative Restrictions: GATT in general prohibits the use of quantitative restrictions on imports and exports. Exceptions: agriculture - when government needs to remove surplus of agricultural and fisheries products. balance of payments - to safeguard balance of payments. If a country's foreign exchange reserve is low. Developing countries - LDCs may use import quotas to encourage infant industries. National Security- Strategic controls on certain exports.

Source: WTO Secretariat Evolution of Regional Trade Agreements in the world, The following Chart shows all RTAs notified to the GATT/WTO ( ), including inactive RTAs, by year of entry into force. Source: WTO Secretariat