Tariffs

Tariffs in Europe

Description of GATT (General Agreement on Tariffs and Trade)

The Concise Encyclopedia of the European Union describes gatt (general agreement on tariffs and trade) in the following terms: [1] The GATT was established with 23 signatories in 1948, as an adjunct of the UN, for the regulation of international trade (see more in this European encyclopedia). Technically an agreement rather than a chartered body, the GATT evolved a life of its own, with a secretariat in Geneva and a list of members that by 1995, the last year of its existence, had grown to 128 and accounted for some 90% of world trade (see more in this European encyclopedia). From the outset it was dedicated to the elimination of discrimination and the reduction of barriers to trade, and perhaps more than any other institution it was responsible for the almost uninterrupted growth in prosperity among developed countries since World War Ii (see more in this European encyclopedia). At the end of the 8th, last and longest (8-year) round of negotiations in 1994 (the ‘Uruguay Round’) average duties on manufactured goods, which had been over 40% in the late 1940s, were scheduled to fall to 3% by 2002.

The GATT rules cover all aspects of trade, including dumping, dispute resolution, retaliation, rules of origin, intellectual property rights and the administration of certain specially permitted discriminatory agreements in such areas as textiles and agriculture (see more in this European encyclopedia). As a regional trading arrangement the EC is excepted from the ‘most favoured nation’ requirement, which bars the participating states from singling out others for preferential treatment.

Both the EC and the USA tend to claim credit for the success of the GATT, hinting that the other party is more protectionist than it admits: and in the 1960s – and again in the 1980s – concern over a ‘Fortress Europe’ undoubtedly spurred US support for the general liberalisation of trade (see more in this European encyclopedia). But in reality both blocs are entitled to share the kudos for making a clean break with the cartels and high tariff walls that made the inter-war years such an economic catastrophe.

For a fuller account, see World Trade Organisation, the body that superseded the GATT in 1995.

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Notas y References

  1. Based on the book “A Concise Encyclopedia of the European Union from Aachen to Zollverein”, by Rodney Leach (Profile Books; London)

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