The General Agreement on Tariffs and Trade (GATT)
The General Agreement on Tariffs and Trade (GATT) agreement was signed in Geneva, Switzerland in 1947 with the following basic principles:
- That consultations should take place when tariff charges are being considered.
- That no signatory should show trading discrimination against another.
- That negotiations should be held regularly to attempt to reduce tariff barriers to promote international trade.
These basic principles are opposed to quotas, dumping discrimination and all other restrictive devices that hamper multilateral trade.
The current GATT agreement, which was concluded in Uruguay in December 1993 was endorsed by 120 countries on April 15, 1994. It has been described as the most comprehensive and ambitious trade agreement in history.
The favourable effects of the treaty will add an annual $235 billion to world economic income within a decade. It is designed to expand trade both by cutting tariffs and ‘binding’ them. In addition, the treaty will, for the first time, apply rules to trade in services like tourism and banking.
General Agreement on Tariffs and Trade (GATT) and African countries
Studies of Uruguay Round of Talks show that African countries, which account for only 2.6% of world trade will not gain any net benefit at all. It will in-fact end up a net loser unlike all other continents.
Also, all countries recognized as net importers of food are to lose out in the arrangement. The impact will be felt first and mostly in the agricultural sector which is dominant in Africa.