General Agreement on Trade and Tariff (GATT) The GENERAL AGREEMENT ON TRADE AND TARIFF is a voluntary agreement to give tariff concessions and reduce restrictions on imports among the trading countries of the world. Pakistan is one of the founder members of GATT which was established in 1947. At present there are 135 countries of the world which are members of the GATT. The guiding principles of GATT are in brief as under:- Principles of GATT; 1) World trade should be carried on non-discriminatory basis. 2) A country should protect its domestic industry by means of custom tariffs and not through trade barriers. 3) The trading members by mutual consultations will look to promote the trading interests of each country. 4) The GATT provides a framework within which the negotiations can be held to reduce tariffs and other trade barriers. The GATT is labeled as a "rich countries club". Here the interests of U.S.A. And its allied developed nations predominate. The benefits of reducing tariffs and removing restrictions on imports have gone more to the industrialized world. Pakistan in the New Trade Policy 1994-95 has started implementing the GATT rules. Keeping in view the obligations of new trade order the import duties have been brought down to 70% will be further reduced in the next two years. The tariff system is also being aligned with the global tariff system.
The general agreement on trade and tariff (GATT) is a voluntary agreement to give tariff concessions and reduce restrictions on imports among the trading countries of the old. Pakistan is one of the founder members of GATT which was established in 1947. At present there are 135 countries of the world which are the members of the GATT. The guiding principles of GATT are:World trade should be carried on non discriminatory basis.
A country should protect its domestic industry by means of custom tariff and not through trade barriers.The trading members by mutual consultations will look to promote the trading interests of each other.The GATT provides a frame work within which the negotiations can be held to reduce tariffs and other trade barriers.
The GATT is labeled as rich countries club. Here the interests of USA and its allied developed nations predominate. The benefits of reducing tariffs and removing restrictions on imports have gone more to the industrialized world.Pakistan in the new trade policy 1994-95 has started implementing the GATT rules. Keeping in view the obligations of new trade order the import duties have been brought down to 70% and will be further reduced in the next two years. The tariff system is also being aligned with the global tariff system.
To cater to the needs of our consumer society industrialists in developed countries are fast expanding their production base. To avoid the danger of cut-throat competition or trade wars which could inflict crippling damage on their economies, they decided to become trading partners instead of rivals. They evolved a new-pattern of global trade based on cooperation rather than competition by substantially reducing or abolishing tariffs and other barriers imposed on goods and services in international markets.
The history of GATT, the aim of which is to move the world in the direction of free trade began with the first meeting of trade representatives of 23 countries taking place in Geneva in the year 1947. The final breakthrough in these epoch-making talks was achieved on December 15, 1993 when 117 countries put their seal of approval on them. The Geneva round concluded within a year to be followed by a period of hiatus lasting more than two decades during which little progress was made.
The Tokyo round which ran from 1973 to 1979 resulted in some cuts in tariffs, but the policy of giving protection to home markets was not abandoned by the negotiating countries. Problems cropped up when the economies of Japan and West Germany boomed while that of the USA was sucked into a recession. Although Americans talked of fair trade within the perimeter of free trade, they themselves did not always practice what they preached.
