DIFFERENCE BETWEEN GATT AND WTO

INTRODUCTION: 

THE GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT): 

The GATT was established in the year 1948 and was operational till 1994. From 1948 to 1994, the  GATT provided the rules for much of world trade and presided over periods that saw some of the  highest growth rates in international commerce. It seemed well-established but throughout those  47 years, it was a provisional agreement and organization and GATT mainly dealt with trade in  goods. The GATT’s purpose was to make international trade easier. The GATT held eight rounds  in total from April 1947 to September 1986, each with significant achievements and outcomes. In  1995 the GATT was absorbed into the World Trade Organization (WTO), which extended it. One  of the key achievements of the GATT was that of trade without discrimination. 

LOCATION: Geneva, Switzerland 

ESTABLISHED: 30th October, 1947 

EFFECTIVE DATE: 1st January, 1948  

CREATED BY: Uruguay Round negotiations (1986-94) 

MEMBERSHIP: 23 Countries representing 90% of world trade 

FUNCTIONS: 

• to form rules to end or restrict the most costly and undesirable features of the pre-war protectionist period, namely quantitative trade barriers such as trade controls and quotas. • provided a system to arbitrate commercial disputes among nations, and the framework  enabled a number of multilateral negotiations for the reduction of tariff barriers.

THE WORLD TRADE ORGANISATION (WTO): 

The World Trade Organization (WTO) is the only global international organization dealing with  the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by  the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that  trade flows as smoothly, predictably and freely as possible. 

LOCATION: Geneva, Switzerland 

ESTABLISHED: 1 January 1995 

CREATED BY: Uruguay Round negotiations (1986-94) 

MEMBERSHIP: 164 members representing 98% of world trade (as of 30 Sept 2018) BUDGET: 197 million Swiss francs for 2018 

SECRETARIAT STAFF: 630 

HEAD: Roberto Azevêdo (Director-General) 

FUNCTIONS: 

• Administering WTO trade agreements 

• Forum for trade negotiations 

• Handling trade disputes 

• Monitoring trade policies 

• Technical assistance and training for developing economies 

• Cooperation with other international organizations

GATT WTO 

• The full form is General Agreements on  Trade and Traffic. 

• It was a provisional and Ad-hoc  agreement and organisation.  

• The members of the GATT are  contracting parties. 

• The GATT had no permanent structure  and not much emphasis was given to  trips and trims.  

• The approach of the GATT was  negotiation approach. 

• It was designed with an intention and  attempt to establish the International  Trade Organisation and the goal was to  promote free and competitive  international trading environment  benefiting efficient producers. 

• Itsrules are applicable totrade inmerchandise goods 

• GATT was originally a multilateral  instrument but on a later stage  plurilateral agreement were added to it.  

• The full form is World Trade  Organisation. 

• The WTO is a permanent form of  organisation 

• The members of the WTO are  permanent members.  

• The WTO has a rigid permanent  structure with special emphasis to trips  and trims. 

• The WTO had a institutional approach  along with being a legal entity. 

• It was established to serve its own  purpose that trade must flow as  smoothly, predictably and freely as  possible and resolving trade disputes  faster.  

• The rules are applicable to trade inmerchandise andtradeinserviceand trade inrelatedaspects ofintellectualproperty 

• The agreements of the WTO are mostly  multilateral in nature.

• The provisions of the GATT system  allowed domestic legislature to exist  and continue even if it violated the  GATT agreement.  

• The dispute settlement mechanism of  GATT was less efficient and was less  powerful hence, giving rise to WTO.  Moreover, the ruling of the GATT can  be blocked making it more susceptible  of blocking. 

• Whereas. the provision of WTO had  more authority than GATT and does not  allow any domestic legislature  contradiction. 

• The dispute settlement system of WHO  is more powerful and efficient and the  ruling of WTO was more difficult to  block was less susceptible to be blocked 

AUTHOR – ADITI KAMBLE 

SYMBIOSIS LAW SCHOOL, PUNE