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GATT (General agreement on tariffs and trade) with WTO (World Trade organization)

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At the end of the Second World War, while the 19th century had experienced periods of alternation between trade liberalization and protectionist tendencies, the desire to ensure a gradual liberalization of trade and to lower tariff barriers was confirmed.

In October 1947, the GATT (General Agreement Tariffs and Trade is) was signed in Geneva by 23 nations. With aim of liberalizing trade to enable sustainable growth and development of all countries, the GATT in 1947 hoped to rally more nations to its cause.

In almost 60 years in business, how have the GATT and the WTO managed to advance free trade? The transformation of GATT in 1995: Did the organization change something in its goals and its ability to coordinate with the member nations?

The promotion of free trade under GATT is based on the theory of comparative advantage developed by Ricardo. He explains that all nations have an interest in international trade, even nations that do not have that absolute benefit.

Each country has an interest in specializing in the production of the property in which it has the relative advantage of being the most important (see example of Great Britain and Portugal for textiles and wine).

The GATT operates on the principle of consensus and therefore takes as much as possible its decisions unanimously or by a qualified majority. It meets in sessions during which each nation that has seen an elected office with the Chairman of the GATT, the Chairman of the Committee on Trade and Development and Vice-Presidents of the contracting parties.

The GATT fights against all forms of protectionism. But they are the most difficult to control than others. The tariff is easily identifiable and is not necessarily an advantage in terms of cost-benefit to consumers and producers at country level.

Quantitative restrictions that are part of the arsenal of the perfect classic are just as protectionist. For example, the United States for a time restricted the number of Japanese cars imported by invoking injuries on employment in theU.S. automotive sector (200,000 jobs lost from 78 to 80). The United States is obviously not the only ones to use the quota as a protectionist measure.

Tags : GATT (General agreement on tariffs and trade) with WTO (World Trade organization); the roles of these organizations

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