A Major Flaw Of The Original General Agreement On Tariffs And Trade (Gatt) Was That It Lacks The

08 Sep A Major Flaw Of The Original General Agreement On Tariffs And Trade (Gatt) Was That It Lacks The

GATT was created in 1948 to regulate world trade. It was created to stimulate economic recovery after World War II by reducing or eliminating tariffs, quotas and subsidies. The most important round of GATT negotiations was the Uruguay Round, which began in September 1986. It ended on 15 April 1994, after almost eight years of negotiations, and entered into force on 1 January 1995. The resulting comprehensive document contained both major revisions to the GATT, as was the case after the previous seven rounds of negotiations, and a wide range of other agreements covering two types of points: (1) issues not previously covered by normal GATT rules, such as trade-related investment measures, trade in services, intellectual property rights and agriculture, textiles and clothing; and (2) issues that have been incompletely addressed in previous negotiations, such as rules of origin, dumping, subsidies, safeguard measures and dispute settlement procedures. Finally, free trade agreements between countries were authorized under gatt, opening the door to the Canada-United States Free Trade Agreement in 1989 and the North American Free Trade Agreement (NAFTA) in 1994. The GATT, created more than a year before the North Atlantic Treaty Organization (NATO), a Western military alliance, played an important role in the Cold War that began shortly after World War II. It helped the US-led capitalist West spread its influence by liberalizing trade through multilateral agreements. The West, with which Canada was allied, gained more economic allies through these agreements, which strengthened its global influence over the Soviet-led eastern communist bloc. After the Cold War, with the collapse of the Soviet Union in 1991, gatt transformed into a truly global organisation – the WTO – and welcomed former communist countries such as the Czech Republic, Poland and Romania. Quantitative restrictions on imports and export subsidies were generally prohibited by the GATT, but derogations were allowed in certain circumstances.

The two main exceptions for Canada were the MFA and the farm products regime. The latter have been excluded from the GATT trade liberalisation framework, mainly because of the insistence of the United States. .