GATT: Definition, History, Purpose & Members

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  • 0:02 What Is GATT?
  • 0:35 GATT Members
  • 1:06 Impact of World Events
  • 1:55 GATT & the US
  • 2:29 The Purpose of GATT
  • 3:15 Lesson Summary
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Lesson Transcript
Instructor: Kimberly Winston

Kimberly has a MBA in Logistics & Supply Chain Management

Many nations depend on international trade agreements, such as the General Agreement on Tariffs and Trade (GATT), to stimulate their economies. In this lesson, you'll learn about the history, purpose, and members of GATT.

What Is GATT?

The General Agreement on Tariffs and Trade, or GATT for short, was drafted in 1947 as a provisional agreement to regulate international trade. However, the International Trade Organization (ITO), which was supposed to take the place of GATT, was never ratified. GATT was enforced from January 1, 1948 until December 31, 1994, when it was finally replaced by the World Trade Organization (WTO) on January 1, 1995.

GATT Members

There were 23 nations that originally signed the GATT in 1947 in Geneva before it went into effect. The signatories, or contracting parties, included:

  • Australia
  • Belgium
  • Brazil
  • Burma
  • Canada
  • Ceylon
  • Chile
  • China
  • Cuba
  • Czechoslovakia
  • France
  • India
  • Lebanon
  • Luxembourg
  • The Netherlands
  • New Zealand
  • Norway
  • Pakistan
  • Southern Rhodesia
  • Syria
  • South Africa
  • The United Kingdom
  • The United States

Impact of World Events

Anytime you're examining world events, such as the signing of a trade agreement, it's always helpful to examine other world events that may have impacted it. For instance, World War II ended in 1945, just a couple years prior to GATT. Many European countries were economically devastated in the aftermath of World War II. Creating an international trade agreement was one way to help stimulate the world economy.

More than a decade before GATT, during the Great Depression which took place from 1929 until the late 1930s, nations used protectionist strategies as a way to safeguard their economies. This means that nations instigated policies that restricted trade between nations. Instead of helping national economies, protectionist strategies stagnated economic conditions.

GATT & the United States

The United States fought World War II mostly on foreign shores and didn't suffer as devastating effects as most of Europe. Thus, the United States promoted the idea of creating a trade agreement that lowered trade barriers and tariffs (taxes imposed on imports) to bolster the world economy. Many of the 23 nations that originally signed the agreement fought the war on the Allies side with the United States. Ironically, it was the United States' refusal to ratify the ITO charter in 1950 that left the provisional GATT in place for 47 years.

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