GENERAL AGREEMENT ON TARIFF AND TRADE(GATT) :

The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade. According to its preamble, its purpose is the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization in 1995. The original GATT is still in effect under the WTO framework, subject to the modifications of GATT 1994. GATT was the result of an international conference held at Geneva in 1947 to consider a draft charter for the International Trade Organization (ITO). The US initiated negotiations with 22 other countries that led to commitments to regulate 45,000 tariff rates. Technically, GATT was viewed as an agreement under the provisions of US Reciprocal Trade Act of 1934, and hence did not require approval of Congress. It was considered a provisional agreement that would be replaced once the ITO became operational to take over its functions. So GATT began its provisional existence on January 1, 1948, when 23 contracting parties signed the agreement. However, US Congress refused in 1950 to ratify the treaty establishing the ITO. During great depression of 1930s the international trade was badly affected and various countries imposed import restrictions for safeguarding their economies. It resulted in sharp decline in world trade. Due to these restrictions none of the country frequently moves towards export and imports of the goods. This has affected the balance of payment situation of the countries. For this problematic situation in 1945, USA put forward many proposals for extending international trade and employment. On October 30th, 1947; 23 countries at Geneva signed an agreement related to tariffs imposed on trade. This agreement was named as General agreement on Trade and Tariff and then after GATT as an organisation came into existence.

OBJECTIVES OF GATT:
By reducing tariff barriers and eliminating discrimination in international trade, the GATT aims at: There should be expansion of international trade. The countries should move towards the international trade.

With the increase in international trade country can generate new opportunities of employment. So they have fixed their objective as increasing of world production by ensuring full employment in the participating nations. Raising standard of living of the world community as a whole. By improving the international trade country can improve their standard of living. Reduce foreign export subsidies, tariffs and non-tariff barriers, and internal supports. Obtain commercially meaningful increases in access to markets of developing countries; To strengthen and clarify rules for agricultural trade; to reduce or eliminate the subsidization of agricultural production.

PRINCIPLES OF GATT:
Trade should be conducted in a non-discriminatory way. The members of GATT were developed nations as well as developing nations. There was no biasness on the side of developing nations. No member country shall discriminate between the members of GATT in the conduct of international trade. All the terms and conditions, rules and procedures were equal for all developed and developing nations. The use of quantitative restrictions should be condemned. The main aim of forming GATT was to remove tariff and non-tariff barriers. So, removal of this restriction is their main principle. Disagreements should be resolved through consultations. If there is any dispute regarding any policy or agreement it had to solve at the institutional level and not at nation level. To reduce trade barriers and to eliminate discrimination in international trade. In short, members of GATT agree to reduce all restrictions so that, multilateral and free trade may be promoted, leading to wider dimensions of world trade and prosperity.

ROUNDS OF GATT NEGOTIATION:

From the year 1947 the round of negotiation started between member countries of GATT. Between 1947 and till 1994 there were 8 rounds of negotiations between the participating countries who are the members of GATT. The first sixth round was known as Kennedy round and it was related to tariff rates. Seventh round was known as Tokyo round and included the non-tariff obstacles. The 8th round was entirely different from the previous rounds and was known as URUGUAY ROUND. This

round helps to create historical event for betterment of trade. The discussions at this round only gave birth to WORLD TRADE ORGANISATION (WTO). The members of GATT agreed to create new institute that will improve international trade in world. This organisation was created by taking into consideration objectives of GATT.