General Agreement on Tariffs and Trade

Examples of General Agreement on Tariffs and Trade in the following topics:

• The General Agreement on Tariffs and Trade (GATT)

  • The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade.
  • The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade.
  • According to its preamble, its purpose is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. " GATT was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO).
  • GATT held a total of eight rounds, during which countries exchanged tariff concessions and reduced tariffs.
  • Outline the history of the creation of the General Agreement on Tariffs and Trade (GATT)

• From Protectionism to Liberalized Trade

  • In 1934, Congress enacted the Trade Agreements Act of 1934, which provided the basic legislative mandate to cut U.S. tariffs.
  • "Nations cannot produce on a level to sustain their people and well-being unless they have reasonable opportunities to trade with one another," explained then-Secretary of State Cordell Hull.
  • "The principles underlying the Trade Agreements Program are therefore an indispensable cornerstone for the edifice of peace. "
  • Following World War II, many U.S. leaders argued that the domestic stability and continuing loyalty of U.S. allies would depend on their economic recovery.
  • The United States supported trade liberalization and was instrumental in the creation of the General Agreement on Tariffs and Trade (GATT), an international code of tariff and trade rules that was signed by 23 countries in 1947.

• The World Trade Organization (WTO)

  • The World Trade Organization (WTO) was officially formed on January 1, 1995 under the Marrakesh Agreement, with the goal of supervising and liberalizing international trade between participating countries.
  • The General Agreement on Tariffs and Trade (GATT) was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy.
  • Agreement on Agriculture has three central "pillars": domestic support, market access, and export subsidies.
  • General Agreement on Trade in Services was established in 1995 to extend the multilateral trading system to service sector, in the same way as the General Agreement on Tariffs and Trade (GATT) provided such a system for merchandise trade.
  • Agreement on Technical Barriers to Trade ensures that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade.

• A Summary of International Trade Agreements

  • This is usually through tariffs, quotas, taxes, and other trade restrictions.
  • The WTO is the largest international trade organization, replacing the General Agreement on Tariffs and Trade (GATT) in 1995, designed to enable international trade while reducing unfair practices.
  • For example, if the US charges Brazil a 5% tariff on imported clothes, and this is the lowest tariff it has placed on any country in the WTO, all other WTO members must also be charged a 5% tariff.
  • Generally speaking, the United States demonstrates a trade deficit with these countries relative to goods and a surplus relative to services.
  • This map outlines each of the countries involved in the North American Free Trade Agreement, an international trade agreement focused on a geographic proximity.

• Global Trade: Inequalities and Conflict

  • The United States is party to many trade agreements, but one of the best known is the North America Free Trade Agreement (NAFTA).
  • Like other free trade agreements, NAFTA promotes free trade among members, which include the United States, Canada, and Mexico.
  • Since the mid-twentieth century, nations have increasingly reduced tariff barriers and currency restrictions on international trade.
  • Now, trade is regulated in part by worldwide agreements, such as the General Agreement on Tariffs and Trade (GATT), a multilateral agreement that went into effect in 1948.
  • Analyze the impact of global trade on society and industry, ranging from mercantilism to free trade orientation

• The North American Free Trade Agreement (NAFTA)

  • It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada.
  • NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).
  • The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexico's exports to the U.S. and more than one-third of U.S. exports to Mexico.
  • The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico.
  • This allowed corporations to trade freely and import and export various goods on a North American scale .

• Promoting Free Trade

  • Government can promote free trade by reducing tariffs, quotas, and non-tariff barriers.
  • There are a number of barriers to free trade that governments can mitigate, most importantly, tariffs (government imposed import taxes) and quotas (government imposed limits on the quantity of a good that can be imported).
  • NTBs act just like tariffs and quotas in that they are barriers to free trade.
  • Examples of multilateral promotion of free trade are trade agreements such as the North American Free Trade Agreement (NAFTA) in which the US, Mexico, and Canada agreed to allow free trade among one another.
  • Describe the effects of free trade and trade barriers on long run growth

• Costs of Trade

  • There are few or no restrictions on trade and markets are open to both foreign and domestic supply and demand.
  • Free trade is beneficial to society because it eliminates import and export tariffs.
  • However, this does not always occur if a high cost producer has a free trade agreement and the low cost producer does not.
  • Economists have studied free trade extensively and although it creates winners and losers, the main consensus is that free trade generates a large net gain for society.
  • Free trade does not have tariffs and results in net gain for society.

• Multilateralism, Regionalism, and Bilateralism

  • The Trade Expansion Act of 1962, which authorized the so-called Kennedy Round of trade negotiations, culminated with an agreement by 53 nations accounting for 80 percent of international trade to cut tariffs by an average of 35 percent.
  • A more recent set of multilateral negotiations, the Uruguay Round, was launched in September 1986 and concluded almost 10 years later with an agreement to reduce industrial tariff and nontariff barriers further, cut some agricultural tariffs and subsidies, and provide new protections to intellectual property.
  • -Israel Free Trade Area Agreement, took effect in 1985, and the second, the U.S.
  • -Canada Free Trade Agreement, took effect in 1989.
  • As a result of NAFTA, the average Mexican tariff on American goods dropped from 10 percent to 1.68 percent, and the average U.S. tariff on Mexican goods fell from 4 percent to 0.46 percent.

• Tariffs

  • Tariffs are taxes levied on goods entering or exiting a country, and have consequences for both domestic consumers and producers.
  • One barrier to international trade is a tariff.
  • Specific tariffs: Tariffs that levy a flat rate on each item that is imported.
  • Ad valorem tariffs: Tariffs based on a percentage of the value of each item.
  • Compound tariffs: Tariffs that are a combination of specific tariffs and ad valorem tariffs.