GATT Flashcards
What is the GATT?
A trade agreement signed in 1947 to lower trade taxes and remove barriers between countries
What was the goal of the GATT?
To help the world recover after World War II by making trade easier and fairer for everyone
What is the Doha Round?
The latest meeting to improve trade rules, started in 2001 but is still not finished
What year was the World Trade Organization (WTO) created?
1994
How many members does the WTO currently have?
164 members
What is required for a country to join the WTO?
Apply for membership and follow the rules set by the organization
What was the average trade tax on goods in 1947?
22%
What did the average trade tax drop to after 1994?
Below 5%
What was the impact of lower trade taxes due to GATT?
Helped businesses trade more easily and improved economies around the world
Name three countries that were part of the original 23 GATT countries.
- Australia
- Belgium
- Brazil
What is the main aim of the General Agreement on Tariffs and Trade (GATT)?
To promote international trade by reducing trade barriers
What is one goal of GATT related to protectionist policies?
Eliminating protectionist policies like tariffs, quotas, and subsidies
What does GATT seek to create among participating nations?
A level playing field for all participating nations
What was one intention of GATT regarding global economic stability?
To help restore global economic stability after World War II
What is a key aspect of GATT operations regarding negotiations?
Regularly held rounds of negotiations to lower tariffs on specific goods
What does the most-favored nation (MFN) principle entail?
Any tariff reduction granted to one country must be extended to all other GATT members
What is the purpose of establishing a framework for countries regarding trade policies?
To disclose trade policies and resolve trade disputes through consultations and adjudication mechanisms.
This framework promotes transparency and fair trade practices among nations.
What does the limitation on quantitative restrictions aim to discourage?
The use of import quotas and other non-tariff barriers to trade.
Non-tariff barriers can include measures like licensing requirements and standards.
What are exceptions and safeguards in trade policy?
Allowing countries to temporarily raise tariffs in specific situations, like facing severe import surges that could harm domestic industries.
These measures help protect local economies during crises.
What is the Most-favored nation (MFN) principle?
A trade policy that ensures any favorable trading terms offered by one country to another must be extended to all other countries.
This principle promotes equality in trade relations.
What is the General Agreement on Tariffs and Trade (GATT)?
An international agreement that regulates global trade with legally binding rules for member countries.
GATT aimed to manage trade between both rich and poor countries.
When was GATT concluded and what was its significance?
Concluded on October 30, 1947, marking the formal end of negotiations and establishing a framework for reducing trade barriers.
GATT came into effect on January 1, 1948.
What organization replaced GATT?
The World Trade Organization (WTO).
The WTO was established to enhance the global trading system and enforce trade agreements.
What did researchers study regarding trade policies of countries?
How rich and poor countries adjusted their trade policies to fit within the new global trade system established by the WTO.
This research highlights the varying impacts of global trade rules on different economies.
What were the main components of GATT?
- Tariff reduction negotiations
- Most-favored nation (MFN) principle
- Transparency and dispute settlement
- Limitations on quantitative restrictions
- Exceptions and safeguards
These components were designed to facilitate fair and open trade practices.
