# data[].attributes.body
1947 – India’s Independence
India gained independence and could finally decide its own economic and trade policies, marking the start of its journey in global trade.

# data[].attributes.body
1948 – Formation of GATT
The General Agreement on Tariffs and Trade (GATT) was signed to reduce global trade barriers and promote international commerce

# data[].attributes.attachment_link.readable_text
What Is the General Agreement on Tariffs and Trade (GATT)?

The General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23 countries, was a legal agreement minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies while preserving significant regulations.﻿﻿﻿﻿ The GATT was intended to boost economic recovery after World War II through reconstructing and liberalizing global trade.

The GATT went into effect on January 1, 1948.﻿﻿﻿ Since that beginning it has been refined, eventually leading to the creation of the World Trade Organization (WTO) on January 1, 1995, which absorbed and extended it.﻿﻿﻿ By this time 125 nations were signatories to its agreements, which covered about 90% of global trade.﻿﻿﻿

The Council for Trade in Goods (Goods Council) is responsible for the GATT and consists of representatives from all WTO member countries. As of September 2020, the chair of the Goods Council is Swedish Ambassador Mikael Anzén.﻿﻿ The council has 10 committees that address subjects including market access, agriculture, subsidies, and anti-dumping measures.﻿﻿﻿

Key Takeaways

Understanding the General Agreement on Tariffs and Trade (GATT)

The GATT was created to form rules to end or restrict the most costly and undesirable features of the prewar protectionist period, namely quantitative trade barriers such as trade controls and quotas. The agreement also provided a system to arbitrate commercial disputes among nations, and the framework enabled a number of multilateral negotiations for the reduction of tariff barriers. The GATT was regarded as a significant success in the postwar years.

One of the key achievements of the GATT was that of trade without discrimination. Every signatory member of the GATT was to be treated as equal to any other.﻿﻿ This is known as the most-favored-nation principle, and it has been carried through into the WTO.﻿﻿ A practical outcome of this was that once a country had negotiated a tariff cut with some other countries (usually its most important trading partners), this same cut would automatically apply to all GATT signatories. Escape clauses did exist, whereby countries could negotiate exceptions if their domestic producers would be particularly harmed by tariff cuts.﻿﻿

Most nations adopted the most-favored-nation principle in setting tariffs, which largely replaced quotas. Tariffs (preferable to quotas but still a trade barrier) were in turn cut steadily in rounds of successive negotiations.

History of the General Agreement on Tariffs and Trade (GATT)

The GATT held eight rounds of meetings between April 1947 and December 1993. Each of the conferences had significant achievements and outcomes.

The first meeting was in Geneva, Switzerland, and included 23 countries. The focus in this opening conference was on tariffs. The members established tax concessions touching over US$10 billion of trade around the globe.﻿﻿

The second series of meetings began in April 1949 and were held in Annecy, France. Again, tariffs were the primary topic. Thirteen countries were at the second meeting, and they accomplished an additional 5,000 tax concessions reducing tariffs.﻿﻿﻿﻿

Starting in September 1950 the third series of GATT meetings occurred in Torquay, England. This time 38 countries were involved, and almost 9,000 tariff concessions passed, reducing tax levels by as much as 25%.﻿﻿﻿﻿

Japan became involved in the GATT for the first time in 1956 at the fourth meeting along with 25 other countries.﻿﻿ The meeting was in Geneva, Switzerland, and again the committee reduced worldwide tariffs, this time by US$2.5 billion.﻿﻿

This series of meetings and reduced tariffs would continue, adding new GATT provisions in the process. The average tariff rate fell from around 22%, when the GATT was first signed in Geneva in 1947, to around 5% by the end of the Uruguay Round, concluded in 1993, which also negotiated the creation of the WTO.﻿﻿﻿

In 1964 the GATT began to work toward curbing predatory pricing policies. These policies are known as dumping. As the years have passed, the countries have continued to attack global issues, including addressing agriculture disputes and working to protect intellectual property.

# data[].attributes.attachment_link.title
General Agreement on Tariffs and Trade (GATT)

# data[].attributes.attachment_link.description
The General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23 countries, was a legal agreement minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies while preserving significant regulations.﻿﻿﻿﻿ The GATT was intended to boost economic recovery after World War II through reconstructing and liberalizing global trade.

# data[].attributes.body
1971 – End of Bretton Woods System
The US ended the dollar’s convertibility to gold, introducing floating exchange rates that reshaped international currency markets.

# data[].attributes.attachment_link.description
Abstract In August 1971, the classical Bretton Woods system came to an end. The pat value system was killed by mutual disagreements and recriminations about who should adjust—in other words, because of the absence of a truly effective mechanism for multilateral surveillance. It was destroyed, in the first place, on the most general level, because of insufficient flexibility in the system. Exchange rates had hardened, a discussion of alteration had become impossible outside of the dramatic circumstances of a major crisis, and other sorts of adjustment (for instance, in fiscal policy) were too contentious politically. Second, the immediate disturbance that destroyed the system had a particular cause, the monetary expansion of the United States in the late 1960s associated with the Viet Nam war, and a very loose approach to monetary policy in the face of an exchange crisis in 1971. The criticism that had been most cogently expressed by General de Gaulle in the mid-1960s now seemed vindicated by the manner of the collapse. Third, the trigger that demonstrated the incompatibility of different national policy stances within the system was given by the larger flows of capital.

# data[].attributes.body
1991 – India’s LPG Reforms
India implemented Liberalization, Privatization, and Globalization reforms, opening its economy to foreign investments and increasing global trade participation.

# data[].attributes.attachment_link.authors[].name
Alka JainUpdated on: 27 December 2024 5:27 pmUpdated on: 27 December 2024 5:27 pm

# data[].attributes.attachment_link.title
Manmohan Singh’s 1991 LPG Reforms: The Turning Point for Adani’s Business Journey

# data[].attributes.attachment_link.description
India was on the verge of economic collapse in 1991 when foreign exchange reserves dwindled to historic low levels that could only cover a few weeks of imports with the widening fiscal deficit, rising inflation, and India facing a severe balance of payment crisis

# data[].attributes.body
1995 – Establishment of WTO
The World Trade Organization (WTO) replaced GATT as the main body governing global trade rules and dispute resolution among nations.

# data[].attributes.attachment_link.readable_text
The early days of trade

Trade and foreign policy have been intertwined throughout history, with foreign policy often tailored to promote trade interests. In the 3rd century BC, during the Han Dynasty, China used its military power to maintain the Silk Road for its value for trade. In the year 30 BC, Rome conquered Egypt in large part to have a better supply of grain.

Before the GATT

A single page of text from 1941 is a powerful reminder that the desire for peace and security drove the creation of today's global economic system. The global rules that underpin our multilateral economic system were a direct reaction to the Second World War and a desire for it to never be repeated.

How the GATT came into being

The lead negotiators for the creation of the GATT profoundly disagreed on the level of ambition to be achieved but finally overcame their differences.

The GATT years

From 1948 to 1994, the GATT provided the rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seemed well-established but throughout those 47 years, it was a provisional agreement and organization.

Birth of the WTO

The WTO's creation on 1 January 1995 marked the biggest reform of international trade since the end of the Second World War. Whereas the GATT mainly dealt with trade in goods, the WTO and its agreements also cover trade in services and intellectual property. The birth of the WTO also created new procedures for the settlement of disputes.

50th anniversary of the multilateral trading system

1998 marked the 50th anniversary of the multilateral trading system.

Doha Round

The Doha Round was launched in 2001 to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. A fundamental objective of the Doha Development Agenda is to improve the trading prospects of developing countries.

Major achievements

Over the past 20 years, WTO members have agreed major updates to the WTO rulebook to improve the flow of global trade. The WTO's membership has expanded to members, representing over 98% of international trade. In 2015, the WTO reached a significant milestone with the receipt of its 500th trade dispute for settlement.

WTO ministerial conferences

The Ministerial Conference is the highest decision-making body of the WTO and usually meets every two years. The WTO's first Ministerial Conference was held in Singapore in December 1996. Its most recent - the 11th - was held in Buenos Aires in December 2017.

GATT and WTO Directors-General

The first Director-General of the GATT was Eric Wyndham White, who held office from 1948 to 1968. The current Director-General of the WTO is Roberto Azevêdo, who began a second four-year term in September 2017.

25th anniversary of the WTO

In 2020, the WTO marked its 25th anniversary.

# data[].attributes.attachment_link.title
WTO | The history of multilateral trading system

# data[].attributes.attachment_link.description
From the early days of the Silk Road to the creation of the General Agreement on Tariffs and Trade (GATT) and the birth of the WTO, trade has played an important role in supporting economic development and promoting peaceful relations among nations. This page traces the history of trade, from its earliest roots to the present day.

# data[].attributes.body
2001 – China Joins WTO
China’s entry into the WTO positioned it as the world’s leading manufacturing hub, significantly impacting global trade flows.

# data[].attributes.attachment_link.description
Abstract After 14 years of negotiations, China acceded to the World Trade Organization (WTO) on December 11, 2001. A key step in negotiation of the final agreement, the U.S.-China bilateral agreement, was reached on November 15, 1999, and is generally regarded as the core of the final agreement. Because this document was made public at the time the agreement was reached, whereas other bilateral agreements have not been, there has been greater opportunity to assess its impact, and some of the material referenced below is based on this bilateral agreement. More recently, an official summary by the WTO of the entire agreement has been released, and the first outside assessments of the entire agreement are now becoming available (WTO, 2001). Some additional information is available on the bilateral agreements with the European Union and with other countries, even though the texts of these agreements have not been made public. The summary of the key features of the agreement below is based on the WTO summary and, to a lesser extent, the U.S.-China bilateral agreement (Boxes 12.1 and 12.2 provide additional detail):

# data[].attributes.body
2008 – Global Financial Crisis
The collapse of major financial institutions triggered a worldwide recession, severely slowing international trade and economic growth.

# data[].attributes.body
2016 – Brexit Referendum
The United Kingdom voted to leave the European Union, creating uncertainty in European and global trade agreements.

# data[].attributes.attachment_link.description
Brexit (;[1] portmanteau of “British exit”) was the withdrawal of the United Kingdom (UK) from the European Union (EU). It officially took place at 23:00 GMT on 31 January 2020 (00:00 1 February 2020 CET).[a] The UK is the only sovereign country to have left the EU. The UK had been a member state of…

# data[].attributes.body
2020 – COVID-19 Pandemic
The pandemic disrupted global supply chains and accelerated the shift towards digital trade, e-commerce, and online business models

# data[].attributes.body
2023 – Rise of AI-Driven Global Trade
Artificial Intelligence began transforming global commerce through automation, predictive analytics, and improved supply chain management.

# data[].attributes.attachment_link.title
AI market projected to hit $4.8 trillion by 2033, emerging as dominant frontier technology

# data[].attributes.attachment_link.description
AI’s rapid rise risks deepening divides, with development concentrated in major economies and firms. Strategic investment and inclusive global governance are key to ensuring its benefits are widely shared.