What Does A General Agreement Do

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At the same time, 15 countries focused on negotiating a simple trade agreement. They agreed to remove trade restrictions on $10 billion or one-fifth of the world`s trade zone. A total of 23 countries signed the GATT agreement on 30 October 1947, paving the way for its implementation on 30 June 1948. The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries whose overall objective was to promote international trade by removing or removing trade barriers, such as tariffs or quotas. According to its preamble, its objective was to “substantially reduce tariffs and other trade barriers and eliminate mutually beneficial and reciprocal preferences.” The interests of developing countries have inspired both the overall structure of the agreement and certain articles. In particular, the objective of facilitating the increasing participation of developing countries in trade in services has been enshrined in the preamble to the agreement and is based on the provisions of Article IV. In particular, this article obliges Members to negotiate specific commitments to strengthen the national service capacity of developing countries; Improving developing countries` access to distribution channels and information networks; and liberalizing market access in the areas of interest to these countries. The General Agreement on Tariffs and Trade (GATT) was never conceived as a stand-alone agreement. Instead, it should be only part of a much broader agreement to establish an International Trade Organization (ITO). The ITO should encourage trade liberalization by establishing guidelines or rules that Member States would approve. The ITO was conceived at the Bretton Woods Conference, which brought together New Hampshire`s key allies in 1944, and was seen as a complement to two other organizations that were also conceived there: the International Monetary Fund (IMF) and the World Bank. The IMF would monitor and regulate the international fixed exchange rate system, the World Bank would assist reconstruction and development loans, and the ITO would regulate international trade.

Imports from third countries were subject to variable import duties prior to the introduction of the GATT/WTO (WTO) agreement on 1 July 1995. These taxes are now converted into a fixed tariff, payable in euros per tonne or as a percentage of the entry price. Under the agreement, rates were reduced by an average of 36% compared to the 1986-1988 reference period. In addition, the GATT/WTO agreement provides minimum quotas for access to tariffs at reduced rates of 5% of consumption over the reference period.

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