Explain the relationship between the objectives of the General Agreement on Tariffs and Trade and the concept of free trade.
GATT promotes free trade by removing many barriers to it.
http://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade
The General Agreement on Tariffs and Trade (GATT) and the concept of free trade are closely related. GATT was a multilateral agreement that aimed to promote free and open trade by reducing trade barriers, such as tariffs and quotas, between member countries. Now, GATT has been succeeded by the World Trade Organization (WTO), which continues to uphold the principles of free trade.
At its core, free trade is the principle of allowing goods and services to be traded between countries without unnecessary barriers or restrictions. It advocates for the removal of trade barriers like customs duties, import quotas, and discriminatory regulations to encourage the flow of goods and services across borders. The objective of free trade is to promote economic growth, create employment opportunities, expand consumer choices, enhance efficiency, and foster global cooperation.
Similarly, the primary objective of GATT and now the WTO is to liberalize international trade and promote free trade among member countries. GATT facilitated negotiations among countries to lower trade barriers and establish a set of rules and principles governing international trade. These rules aimed to ensure non-discrimination, transparency, and predictability in trade relations.
GATT and the WTO work towards achieving free trade objectives by several means:
1. Negotiations: GATT and WTO organize negotiations among member countries to reduce tariffs, eliminate trade barriers, and open up markets further. These negotiations result in trade agreements that bind member countries to mutually agreed-upon rules and regulations.
2. Dispute Settlement: GATT and the WTO provide a platform for resolving trade disputes among member countries. The dispute settlement mechanism ensures that trade rules are enforced and trade barriers are addressed, thus fostering a more open and predictable international trading system.
3. Trade Policy Review: GATT and the WTO conduct regular reviews of member countries' trade policies to ensure transparency and monitor their compliance with agreed-upon rules. This process encourages countries to adhere to free trade principles and identify areas where improvements can be made.
In summary, the objectives of GATT and the concept of free trade are interconnected. GATT, as the predecessor to the WTO, aimed to promote free trade by negotiating agreements, resolving disputes, and reviewing trade policies to ensure the reduction of trade barriers and the creation of a more open and fair global trading system. Free trade, in turn, seeks to enhance economic well-being and promote cooperation among countries by allowing the free exchange of goods and services across borders.