General Agreement on Customs Tariffs and Trade (GATT)
The General Agreement on Customs Tariffs and Trade (GATT) refers to the General Agreement on Tariffs and Trade, originated in 1994 after World War II, when the United States and 22 other countries decided to establish agreements and regulations on the transactions of certain commodities and vital sins for these economies by gradually reducing tariffs.
Its objective was to establish equitable relations without discrimination and to prohibit the subsidy of non-agricultural exports, thus seeking to constitute the third pillar of the world economic order, together with the World Bank and the International Monetary Fund.
Gatt trade negotiations in the Uruguay Round took place from 1986 to 1994, with 123 nations interested in the agreements reached during those negotiations; such as the general agreement on trade in services, agreement on intellectual property rights and the liberation of trade in agricultural and textile goods.
A key manifestation of this round was the Marrakesh agreement, which was signed in 1994 stating that the World Trade Organization (OMC) would be responsible for continuing the GATT mandate. It began operations in January 1995 in charge of carrying out the following actions. Read more from the OMC.
- Promoting trade
- Governing business relationships
- Prevent trade-damaging policies or practices
The origin of the OMC comes with the validity of the GATT in 1995, which is currently run by 151 member countries.
The OMC compared to the GATT, has an improved mechanism in trade disputes, as the WTO is based on the use of memberships and does not depend on consensus of traditional trade negotiations. This feature was designed to improve the previous process, which generated disputes between the parties and could cause delays, obstruction of negotiations and even non-compliance.