General Agreement on Tariffs and Trade (GATT)

GATT was a series of multi-lateral treaties — and an organization of the same name — designed to regulate trade between the member nations.

Definition of General Agreement On Tariffs And Trade

In accordance with the work A Dictionary of Law, this is a description of General Agreement On Tariffs And Trade :

An international treaty signed in 1947 to provide for some measure of world free trade with the aim of reducing high tariffs on goods. Its objectives in extending free trade have been achieved in a series of eight negotiations (rounds); the last of these, the Uruguay Round (1986-94), led to the establishment of the World Trade Organization and further agreement to ensure more free trade around the world.

Legal Materials

The main GATT treaty is posted on the Internet by the World Trade Organization and Tufts’ Multilaterals Project.

The GATT Digital Library posts a substantial collection of GATT documents and publications (including treaties and other legal instruments).

GATT Panel Decisions are available on Westlaw (WTO-DEC). GATT principal decisions, resolutions, recommendations and reports are available on Lexis (ITRADE;BISD).

The original GATT organization and agreements (which regulated only trade in goods) were incorporated into the much broader World Trade Organization in 1995 by the Uruguay Round agreements, which created the WTO to regulate trade in goods, services and intellectual property.

For more information and resources, see NYU’s WTO and GATT Research page.

Basic Structure of the GATT Rules for Trade in Goods

Geza Feketekuty said that the “GATT rules for trade in goods are woven around a few key notions. These key notions are that : barriers should be imposed at the border; they should take the form of tariffs; the tariffs should be subject to negotiation; the tariffs resulting from such negotiations should be bound in national schedules; tariffs should be applied equally to goods imported from all member countries; and domestic regulations should not discriminate against foreign goods once they have crossed the border and paid the tariff. The GATT rules permit various exceptions from these basic rules, and they spell out how these rules are to be applied with respect to various types of government measures, but the core rules are those that implement (several) central notions …

The GATT provided that the negotiation of tariffs (and quotas where permitted) should be carried out on the basis of bilateral negotiations through the exchange of requests and offers. As a result of the experience gained from successive rounds of negotiations, it was found that that more liberalization could be achieved if such bilateral negotiations were based on multilaterally agreed targets or formulas for the negotiations.”

Text of the GATT: Part I

Article I
General Most-Favoured-Nation Treatment

1. With respect to customs duties and charges of any kind imposed on or
in connection with importation or exportation or imposed on the
international transfer of payments for imports or exports, and with
respect to the method of levying such duties and charges, and with
respect to all rules and formalities in connection with importation and
exportation, and with respect to all matters referred to in paragraphs 2
and 4 of Article III, any advantage, favour, privilege or immunity
granted by any contracting party to any product originating in or
destined for any other country shall be accorded immediately and
unconditionally to the like product originating in or destined for the
territories of all other contracting parties.

2. The provisions of paragraph 1 of this Article shall not require the
elimination of any preferences in respect of import duties or charges
which do not exceed the levels provided for in paragraph 4 of this
Article and which fall within the following descriptions:

(a) Preferences in force exclusively between two or more of the
territories listed in Annex A, subject to the conditions set forth
therein;

(b) Preferences in force exclusively between two or more territories
which on July 1, 1939, were connected by common sovereignty or
relations of protection or suzerainty and which are listed in
Annexes B, C and D, subject to the conditions set forth therein;

(c) Preferences in force exclusively between the United States of
America and the Republic of Cuba;

(d) Preferences in force exclusively between neighbouring countries
listed in Annexes E and F.

3. The provisions of paragraph 1 shall not apply to preferences between
the countries formerly a part of the Ottoman Empire and detached from it
on July 24, 1923, provided such preferences are approved under paragraph
5 of Article XXV, which shall be applied in this respect in the light of
paragraph 1 of Article XXIX.

4. The margin of preference on any product in respect of which a
preference is permitted under paragraph 2 of this Article but is not
specifically set forth as a maximum margin of preference in the
appropriate Schedule annexed to this Agreement shall not exceed:

(a) in respect of duties or charges on any product described in such
Schedule, the difference between the most-favoured-nation and
preferential rates provided for therein; if no preferential rate is
provided for, the preferential rate shall for the purposes of this
paragraph be taken to be that in force on April 10, 1947, and, if
no most-favoured-nation rate is provided for, the margin shall not
exceed the difference between the most-favoured-nation and
preferential rates existing on April 10, 1947;

(b) in respect of duties or charges on any product not described in the
appropriate Schedule, the difference between the most-favoured
nation and preferential rates existing on April 10, 1947.

In the case of the contracting parties named in Annex G, the date of
April 10, 1947, referred to in sub-paragraphs (a) and (b) of this
paragraph shall be replaced by the respective dates set forth in that
Annex.

Article II
Schedules of Concessions

1. (a) Each contracting party shall accord to the commerce of the other
contracting parties treatment no less favourable than that provided for
in the appropriate Part of the appropriate Schedule annexed to this
Agreement.

(b) The products described in Part I of the Schedule relating to any
contracting party, which are the products of territories of other
contracting parties, shall, on their importation into the territory to
which the Schedule relates, and subject to the terms, conditions or
qualifications set forth in that Schedule, be exempt from ordinary
customs duties in excess of those set forth and provided for therein.
Such products shall also be exempt from all other duties or charges of
any kind imposed on or in connection with importation in excess of those
imposed on the date of this Agreement or those directly and mandatorily
required to be imposed thereafter by legislation in force in the
importing territory on that date.

(c) The products described in Part II of the Schedule relating to any
contracting party which are the products of territories entitled under
Article I to receive preferential treatment upon importation into the
territory to which the Schedule relates shall, on their importation into
such territory, and subject to the terms, conditions or qualifications
set forth in that Schedule, be exempt from ordinary customs duties in
excess of those set forth and provided for in Part II of that Schedule.
Such products shall also be exempt from all other duties or charges of
any kind imposed on or in connection with importation in excess of those
imposed on the date of this Agreement or those directly and mandatorily
required to be imposed thereafter by legislation in force in the
importing territory on that date. Nothing in this Article shall prevent
any contracting party from maintaining its requirements existing on the
date of this Agreement as to the eligibility of goods for entry at
preferential rates of duty.

2. Nothing in this Article shall prevent any contracting party from
imposing at any time on the importation of any product:

(a) a charge equivalent to an internal tax imposed consistently with
the provisions of paragraph 2 of Article III in respect of the like
domestic product or in respect of an article from which the
imported product has been manufactured or produced in whole or in
part;

(b) any anti-dumping or countervailing duty applied consistently with
the provisions of Article VI;

(c) fees or other charges commensurate with the cost of services
rendered.

3. No contracting party shall alter its method of determining dutiable
value or of converting currencies so as to impair the value of any of the
concessions provided for in the appropriate Schedule annexed to this
Agreement.

4. If any contracting party establishes, maintains or authorizes,
formally or in effect, a monopoly of the importation of any product
described in the appropriate Schedule annexed to this Agreement, such
monopoly shall not, except as provided for in that Schedule or as
otherwise agreed between the parties which initially negotiated the
concession, operate so as to afford protection on the average in excess
of the amount of protection provided for in that Schedule. The provisions
of this paragraph shall not limit the use by contracting parties of any
form of assistance to domestic producers permitted by Other provisions of
this Agreement.

5. If any contracting party considers that a product is not receiving
from another contracting party the treatment which the first contracting
party believes to have been contemplated by a concession provided for in
the appropriate Schedule annexed to this Agreement, it shall bring the
matter directly to the attention of the other contracting party. If the
latter agrees that the treatment contemplated was that claimed by the
first contracting party, but declares that such treatment cannot be
accorded because a court or other proper authority has ruled to the
effect that the product involved cannot be classified under the tariff
laws of such contracting party so as to permit the treatment contemplated
in this Agreement, the two contracting parties, together with any other
contracting parties substantially interested, shall enter promptly into
further negotiations with a view to a compensatory adjustment of the
matter.

6. (a) The specific duties and charges included in the Schedules relating
to contracting parties members of the International Monetary Fund, and
margins of preference in specific duties and charges maintained by such
contracting parties, are expressed in the appropriate currency at the par
value accepted or provisionally recognized by the Fund at the date of
this Agreement. Accordingly, in case this par value is reduced
consistently with the Articles of Agreement of the International Monetary
Fund by more than twenty per centum, such specific duties and charges and
margins of preference may be adjusted to take account of such reduction;
Provided that the CONTRACTING PARTIES (i.e., the contracting parties
acting jointly as provided for in Article XXV) concur that such
adjustments will not impair the value of the concessions provided for in
the appropriate Schedule or elsewhere in this Agreement, due account
being taken of all factors which may influence the need for, or urgency
of, such adjustments.

(b) Similar provisions shall apply to any contracting party not a
member of the Fund, as from the date on which such contracting party
becomes a member of the Fund or enters into a special exchange agreement
in pursuance of Article XV.

7. The Schedules annexed to this Agreement are hereby made an integral
part of Part I of this Agreement.

 

General Agreement on Tariffs and Trade

Embracing mainstream international law, this section on general agreement on tariffs and trade explores the context, history and effect of the area of the law covered here.

Resources

See Also

• International Organization
• Foreign Relations
• Organization
• United Nations
• United Nations System
• UN Agency

Resources

Further Reading

• The entry “general agreement on tariffs and trade” in the Parry and Grant Encyclopaedic Dictionary of International Law (currently, the Encyclopaedic Dictionary of International Law, 2009), Oxford University Press

Resources

See Also

• International Trade
• Multilateral Trade Negotiations
• GATT Accession
• Treaties
• WTO
• General Agreement on Tariffs and Trade resources
• World Trade Organization
• Outline of International economic laws
• Community Acquis

Further Reading

• Group of Negotiations on Services, The Uruguay Round of Multilateral Trade Negotiations, “Scheduling of Initial Commitments in Trade in Services: Explanatory Note”, MTN.GNS/W/164. Geneva: GATT Secretariat, September 3, 1993.
• Howse, Robert, “Comments on Feketekuty, Nicolaidis/Trachtman, and Zampetti Papers”.
• Mattoo, Aaditya, “National Treatment in the GATS: Corner Stone or Pandora’s Box?” Journal of World Trade Law, Volume #?, Year?
• Thompson, Rachel, “Formula Approaches to Improving GATS Commitments: Some Options for Negotiations”
• World Trade Organization, The Results of the Uruguay Round of Trade Negotiations: The Legal Texts, Geneva: WTO, 1995.

Author: international

Mentioned in these Entries

Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea 5, Conventions: Chronological Index, Encyclopedia of Public International Law update, European Energy Charter, GATS, general average and others, General Agreement on Tariffs and Trade resources, General Agreement on Tariffs and Trade, International Court of Justice, International organizations articles of conventions, International trade law, List of International Business Law Selected Cases, by Subject, List of international public law topics, List of international trade topics, Outline to Global Business Law, Trade and Commercial Relations conventions, Trade law in this Encyclopedia.

General Agreement on Tariffs and Trade (GATT) in relation with International Trade

In the context of trade organizations, Christopher Mark (1993) provided the following definition of General Agreement on Tariffs and Trade (GATT): The central international institution supporting negotiations for the reduction of trade barriers and for the resolution of trade disputes. As a set of agreements, the GATT also constitutes the legal framework of the world trading system. The General Agreement was completed in 1947 as an interim arrangement pending establishment of the projected I international Trade Organization ( ITO ), and was envisaged primarily as a code of conduct for commercial policy among a fairly small group of countries. After the US Congress failed to ratify the ITO charter, the articles of the GATT and related agreements became the sole multilateral instrument establishing the basic rules of international trade. (The GATT is applied by the United States as an executive agreement which did not require ratification by the Senate.) The GATT provides a forum for multilateral negotiations to reduce trade barriers (see GA1T Round, Sec.l); for dispute settlement (Sec. I); and for negotiating new trade rules and improving existing rules. The Contracting Parties (Sec. I)themselves administer the trade pacts; most decisions are therefore made by consensus, and the role of the Director-General and the GATT Secretariat are only advisory .As of August 1993, 110 countries4 were GATT members, and accession negotiations for 10 others were 3 Members are elected to the European Parliament every five years on the basis of proportional representation in each EC member state except the United Kingdom, which uses simple majority voting by constituency. Underway (see “The GATT System: Spectrum of Country Affiliations” in Appendix C). The GA TT is headquartered in Geneva, Switzerland.