General Agreement on Tariffs and Trade
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General Agreement on Tariffs and Trade (usually abbreviated GATT) functions as the foundation of the WTO trading system, and remains in force, although the 1995 Agreement contains an updated version of it to replace the original 1947 one.
The GATT, as an international agreement, is very similar to a treaty. Under United States law it is classed as a congressional-executive agreement. It is based on the "unconditional most favored nation principle." This means that the conditions applied to the most favored trading nation (i.e. the one with the least restrictions) apply to all trading nations.
"Rounds" of GATT trade negotiations
The countries who signed GATT now and then negotiated new trade agreements that all would enter into. Each such set of agreements was called a "round". In general, each of these agreements bound the members to reduce certain tariffs, with many special-case treatments of individual products, and in many cases with exceptions and modifications for each country.
- Geneva Round (1948): 23 countries. GATT enters into force.
- Annecy Round (1949): 13 countries.
- Torquay Round (1951): 38 countries.
- Fourth Round (1956): 26 countries. Tariff reductions. Strategy set for future GATT policy toward developing countries, improving their positions as treaty participants.
- Dillon Round (1962): 26 countries. Tariff reductions.
- Kennedy Round (1967): 62 countries. Tariff reductions. This was an across-the-board reduction rather than a product-by-product specification, for the first time. Anti-dumping agreement (which, in the United States, was rejected by Congress).
- Tokyo Round (1979): 102 countries. Reduced non-tariff trade barriers. Also reduced tariffs on manufactured goods. Improvement and extension of GATT system.
- Uruguay Round (1993): 123 countries. Created the World Trade Organization to replace the GATT treaty. Reduced tariffs and export subsidies, reduced other import limits and quotas over the next 20 years, agreement to enforce patents, trademarks, and copyrights, and open up foreign investment