Gatt (Inglés)

March 9, 2011

ITESM Campus León

International Economics
GATT Essay

Professor: Ph.D. Carlos Encinas
Mauricio Durán Vargas
566481

Introduction

The General Agreement on Tariffs andTrade known as GATT was a negotiation made during the UN conference on trade and employment, and it is a result from the failure of the intent to create the International Trade Organization (ITO). TheGeneral Agreement on Tariffs and Trade was created on 1949 and lasted until 1993 when it was substituted by the World Trade Organization in 1995, although the original General Agreement on Tariffs andTrade text is still under the effect of WTO with some minor modifications.

Following World War II, the victor nations sought to create institutions that would eliminate the causes of war. Theirprinciples were to resolve or prevent war through the United Nations and to eliminate the economic causes of war doing this by establishing three international economic institutions. The InternationalMonetary Fund (IMF), The World Bank, The International Trade Organization (ITO); The three were known as the Bretton Woods, the New Hampshire resort were the agreement occurred.

The economicphilosophy of these institutions was classical neoliberalism. The United States Congress agreed with the policies of the International Monetary Fund and the World Bank but it refused to agree to theInternational Trade Organization, this because it compromised their sovereignty too much to the international body.

Because the ITO did not pass the requisitions to settle as an effective agreement theyalternately created the General Agreement on Tariffs and Trade GATT which became the agreement and the organization for establishing and enforcing, through dispute settlement, the international traderules. The GATT was very successful in lowering tariffs, the existing major barrier to free trade at the time. The first five rounds of multilateral trade negotiation succeeded in lowering tariff...