1. GATT – General Agreement on Trade and Tariff
Name- Ria Tandon
B.A. , LL.B R

2. GATT- Introduction
Foundation- GATT was signed by 23 nations in Geneva on October 30, 1947 and took effect on January 1, 1948.
It lasted until the signature by 123 nations in Marrakesh on April 14, 1994 of the Uruguay Round Agreements, which established the World Trade Organization (WTO) on January 1, 1995.
Outcome of the failure to set up ITO .

3. GATT?? Treaty or Organization ?
Was the outcome of the failure of negotiating governments to create the ITO
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.

4. Objectives Was designed 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.

5. GATT Five Key Principles in GATT:
1. trade barriers should be lowered in general and quotas should be eliminated
2. trade barriers should be applied on MFN basis – no discrimination among trading partners
3. national treatment – imported goods treated same as domestic goods

6. GATT Five Key Principles in GATT
4.tariff concessions, once made, cannot be rescinded without compensating trade partners, and new barriers cannot be erected in place of lowered tariffs
5. trade disputes to be settled by consultation

7. First Phase
Commodities which would be covered by the agreement and freezing existing tariff levels
Year
Place/name
Subjects covered
1947
Geneva
Tariffs
1949
Annecy
1951
Torquay

8. Second Phase Focused on reducing tariffs Year Place/name
Subjects covered
Geneva Dillon Round
Tariffs
Geneva Kennedy Round
Tariffs and anti-dumping measures
Geneva Tokyo Round
Tariffs, non-tariff measures, “framework” agreements

9. Third Phase Year Place/name Subjects covered 1986-1994
Extended the agreement fully to new areas such as intellectual property, services, capital, and agriculture. Out of this round the WTO was born.
Year
Place/name
Subjects covered
Geneva Uruguay Round
Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc

10. Achievements

11. ROUNDS NAME START DURAT ION COUNTR IES SUB. COVERED ACHIVEMENTS APRIL
1.GENEVA
APRIL
1947
7 MONTHS 23
TARIFFS
SIGNING OF GATT, 45,000 TARIFF CONCESSIONS AFFECTING $10 BILLION OF TRADE.
2. ANNECY
1949 5
MONTHS 13
COUNTRIES EXCHANGED SOME TARIFF CONCESSIONS.

12. ROUNDS CONT… NAME START DURATIO N COUNT RIES SUB. COVERED ACHEVEMENTS
3. TORQUAY
SEPT. 1950
8 MONTHS 38
TARIFFS
COUNTRIES EXCHANGED SOME TARIFF CONCESSIONS, CUTTING THE TARIFFS BY 25%
4. GENEVA II
JAN. 1956
5 MONTHS 26
TARIFFS, ADMISSION OF JAPAN
$2.5 BILLION IN TARIFF REDUCTION
5. DILLON
SEPT. 1960
11 MONTHS
TARIFF CONCESSION WORTH $4.9 BILLION OF WORLD TRADE.

13. ROUNDS CONT… NAME START DURATION COUNTR IES SUB. COVERED ACHIVEMENTS
6. KENNEDY
MAY 1964
37 MONTHS 62
TARIFFS & ANTIDUMPING
TARIFF CONCESSION WORTH $40 BILLION OF WORLD TRADE
7. TOKYO
SEPT
74 MONTHS
102
TARIFF, NON TARIFF MEASURES, “FRAMEWORK” AGREEMENTS
TARIFF REDUCTION WORTH $190 BILLION ACHIEVED.
8. URUGUAY
SEPT
87 MONTHS
123
TARIFFS,NON TARIFFS,RULES, SERVICES,IP,DI SPUTE SETTLEMENT,TE XTILES,AGRI.
CREATION OF WTO, & EXTENDED THE RANGE OF TRADE NEGOTIATION,LEADING TO THE REDUCTION IN TARIFFS(ABOUT 40%).

14. Trade growth consistently out-paced production growth
Continual reductions in tariffs helped spur very high rates of world trade growth during the 1950s and 1960s — around 8% a year on average
Trade growth consistently out-paced production growth
The rush of new members during the Uruguay Round demonstrated recognition of multilateral trading system as the anchor for development and an instrument of economic and trade reform.

15. Developing Countries: GATT success
Generalized System of Preference: Lower tariff for products originating in developing countries.
Those who :
Same political and History relationship
Beneficiaries limited to developing Countries
Granted by Developed Countries to Developing

16. GSP : Enabling Clause( for Developed and Developing Countries
Preferential Market Treatment to Developing Countries.
Preferential Agreement between Developed and Developing Countries.
Special Treatment to Least Developed Countries

17. LDC : GATT provision Sanitary and Phytosanitary Measures
Agreement for Agriculture Subsidies
Transferring of Technology to LDC

18. Developed Nations Preferential Market Access to LDC
Technical Assistance

19. Difference between GATT and WTO
It was provisional and not permanent.
GATT has contracting parties.
GATT allowed the existing legislations to continue even if they violated it.
GATT was not very power full when it came to its DS mechanism .
WTO
It was permanent in nature.
WTO had members.
WTO does not permit violation.
DS was more efficient in nature.

20. Important Principles
RECIPROCITY: A practice that occurs in GATT negotiating rounds, whereby one country offers to reduce a barrier to trade and a second country “reciprocates” by offering to reduce one of its own trade barriers.
The practice of swapping tariff concessions, facilitates the reduction of trade barriers.
NONDISCRIMINATION: (Equal treatment) If one GATT member offers a benefit or a tariff concession to another GATT member, it must offer the same tariff reduction to all GATT members.

21. Non Discrimination
Most Favoured Nation Treatment: Grant someone a special favour, then have to do the same for all other WTO members. Each member treats all the other members as “most favoured trading partners”.
National Treatment: Imported or locally-produced goods should be treated equally – at least after the foreign goods have entered the market.
Freer Trade: Lowering trade barriers, gradually and through negotiation. Trade barriers concerned include customs duties and measures such as import bans or quotas, red tape, and exchange rate policies.

22. Non Discrimination Predictability through binding and transparency:
Once lowered, promising not to raise trade barriers gives businesses a clearer view of their future opportunities. With stability and predictability, investment is encouraged, jobs are created, and consumers can fully enjoy the benefits of competition (variety, and lower prices).

23. Power of Non Discrimination
Convenience and practicality,
Setting the same tariff policy on imports from all countries ensures that resources are allocated to their most productive use,
On the import side, nondiscrimination ensures that countries purchase imports from the lowest-cost source country, (trade diversion is prevented)
Prevents re-reouting in order to circumvent high tariffs, in which exporter ships its goods to a third country repackages it, and then ships it to a final destination where it will qualify for the third country’s preferential tariff, sometimes substantial transformation becomes necessary that leads the firm to move a stage of production to the third country,
On export side, nondiscrimination protects exporting countries from bilateral opportunism. If one country were later to offer a lower tariff rate to a third country, this could erode the value of the original tariff concession to the first trading partner.

24. National Treatment: Legal Provisions
Art 3: NT to all GATT members
Art 3:1 – No internal taxes to be imposed or other internal Charges
Art 3:2- No higher standard to be set
Art 3:4- GATT member like products to be accorded same status as like product of National Origin
Exceptions : Art 3:8 (a) Govt Procurement , 3.8 (b) Domestic Subsidies , Art XVIII- Infant Industries , Art 3:10 Screen Quota, XXI : Security

25. MFN: Legal Provisions
Art 1:1 – MFN to all GATT members like products for
A) Tariff
B) internal taxes and Charges
C) Regulation on Import and Export
Exception
1. XIII : Quantitative Restriction
2. States Trading Enterprise
3.XXIV: Regional Integration
4. Generalized System of Prefernce

26. Exceptions to gatt’s non discrimination principle
Regional Trade Agreement
Free Trade Agreements
Customs Unions
Administered Protection
Special Tariffs that can be used for particular purposes
Safeguards,
Anti-Damping Duties
Countervailing Duties

27. Benefits of MFN World Economy Efficiency Stabilization of Free Trade
Reduction of the Cost of Maintaining Free Trade

28. Conclusion It benefited both LDC and Developing Nations
It stood the competition of UN , WTO , IMF which ITO couldn’t .
Helped in free Trade by lowering of Competition.
Exceptions provided were reasonable in nature .
GATT was not entirely pro developing Countries.

29. Thank you !!