The General Agreement on Tariffs and Trade (GATT) is an international treaty that was established in 1947 to reduce tariffs and other trade barriers among a number of nations It was established as a result of the Bretton Woods Conference in 1944. The original GATT agreement consisted of 23 countries and the original intention was to encourage international trade through the reduction and elimination of tariffs. This agreement was designed to help create an economic order where countries are able to trade freely and fairly among each other.
GATT has proved to be a great success. Since its inception, the GATT agreement has been revised several times to keep up with the changing global economy. Each revision, known as a Round of Trade Negotiations, has seen further tariff reductions and liberalization of trade rules. There are currently 164 member countries who are signatories to the agreement.
The five best examples of how GATT has benefited the world economy are as follows:
1. Reduced Tariffs - GATT has resulted in a significant reduction in tariffs with almost all the member countries. This has enabled them to reduce the cost of goods and services and has given a boost to the national economies.
2. Boost to Free Trade - GATT has also helped in the strengthening of the multilateral trading system. This has allowed countries to trade freely with each other and to bring down the cost of goods and services. This has been beneficial to the global economy, as it leads to increased economic growth and development.
3. Better Market Access - GATT has helped open up markets for countries that are now able to access foreign markets more easily. This has enabled them to increase their exports and to enjoy greater economic growth.
4. Harmonization of Standards - GATT has also led to harmonization of standards across countries. This has enabled countries to invest in countries with different standards and to be able to export products in a more straightforward manner.
5. Protection of Intellectual Property Rights - GATT has also meant that intellectual property rights are better protected across countries. This has enabled innovators to get better rewards for their products and services.
Overall, GATT has been hugely beneficial for the world economy. It has enabled countries to reduce tariffs, improve their market access, harmonize standards, and protect intellectual property rights. This has enabled them to create a more level playing field and to bring down the cost of goods and services. As a result, GATT has enabled countries to boost their economic growth and development.