Formed in 1947 in Geneva, Switzerland. Free trade between contracting, signatory countries enacted. Intended to mitigate devastating effects of protectionist measures. One severe example of such was the US Smoot-Hawley tariff. It raised import duties from 39 percent to 53 percent, allegedly to reduce Great Depression impacts. This agreement established a multilateral, rule-based trading system for goods and services trading. Requiring a series of negotiation rounds, it reduced average tariffs of 40 percent on manufactured goods in the industrialized nations to about 5 percent. It also convinced less developed nations to use varied, promised reductions. Applied two non-discriminatory principles: (1) Most favored nation and national treatment, and (2) Reciprocity . Successes were strong reductions in all non-tariff barriers and import quotas. Continued to advocate countervailing duties to stop dumping and to offset effects of subsidies. GATT was replaced by World Trade Organization (WTO) on January 1, 1995, after the culmination of Uruguay Round.
Black’s Law Online Dictionary
