Difference Between GATT and WTO

General Agreement on Tariffs and Trade is commonly known GATT. GATT was born in 1948 in order to strengthen international trade. This was done by decreasing the trade barriers among countries by negotiation. It was replaced by the World Trade Organization in 1995 after prolonged deliberations, which continued for 8 years in the GATT. There are over 125 WTO members and more than 90% of total international trade is governed by the rules of WTO. There is numerous people who are confused between the now obsolete GATT and WTO. This article will explain the differences between the GATT and WTO.

The GATT was under the international trade organizations who worked under the aegis of the UN. However, ITO has been replaced as the United States refused to ratify it, which is why the GATT itself has developed a new organization called the WTO. The last GATT round was held in Uruguay in 1993 before it turned into WTO. Although there are rules in the GATT to resolve disputes, it had no power of enforcement that has caused many disputes. WTO has a much stronger provisions for the enforcement of the rules. If a member state is no happy, it may file a complaint with the WTO, which will seek to ensure that the offender has compiled according to the WTO provisions. WTO has the power to demand trade sanctions from members as the ultimate step. The same fact that the GATT, which began with pure 23 members in 1948 contributed to involve more than one hundred members before it was renamed as the WTO is a reflection of the effectiveness of the organization.


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