G e n e r a L a g r e e m e n t o n

The former GATT system, now replaced by the World Trade Organization and the

agreements in the Uruguay Round package, was centred on the General Agreement on

Tariffs and Trade itself. The General Agreement, as negotiated in 1947 among its 23

original participants, laid down central principles to constrain and guide national trade

policies, and provided the basis on which governments were able to carry forward and

extend their multilateral cooperation on trade.

The World Trade Organization has taken over from the General Agreement as the basis for

institutional cooperation and dispute settlement on trade matters among its members. But

the core principles of the GATT are still in place, and the Uruguay Round package cannot

be understood except in relation to them.

Overview

the new multilateral trade agreements which extend GATT-like rules to services and intellectual property,

are perhaps the most eye-catching elements of the results of the negotiations.

Nevertheless, of the total effort expended on the round, most was directed to the traditional GATT ends of

strengthening and broadening the multilateral rules for trade in goods, and of reducing barriers to trade in

goods. The majority of the agreements negotiated in the round concern one or other aspect of trade in

goods.

The Uruguay Round agreements on goods fall essentially into four groups. First is the “GATT

, a

modified version of the original General Agreement on Tariffs and Trade (now referred to as the

“GATT 1947”), together with certain comparatively minor agreements which interpret or bring up to date

particular GATT provisions, and a legal text (the Marrakesh Protocol) that brings under the multilateral

GATT umbrella the individual tariff and non-tariff commitments made by WTO members in the Uruguay

Round. This is the subject of this book.

A second group consists of two major agreements that aim to bring trade in agricultural products, and in

textiles and clothing, within the normal trading rules from which they have in recent years largely escaped.

A third group is made up of five agreements which go well beyond the original GATT rules in prescribing

how particular aspects of policies affecting trade should be applied. And finally, a further group of six

agreements deals with different aspects of the traditional GATT concern to regulate and ease the necessary

formalities of customs and trade administration. These are handled in other books in this series.

GATT 1994 and GATT 1947

What was previously known simply as the GATT (or “the General Agreement”, to distinguish it from the

institution of the same name), is described in the final Uruguay Round package as “GATT

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2  

 THE WORLD TRADE ORGANIZATION AGREEMENTS

clear that it is the original bargain, unaffected by the results of the Uruguay Round.

Although the WTO agreement came into effect on 1 January 1995, the GATT 1947 also continued to apply

during 1995, to ensure that contractual trade relations remained in effect between the GATT contracting

parties during a transitional twelve months in which many countries had not yet completed the process of

becoming members of the WTO.

The “GATT 1994” is the basic set of trade rules, largely taken over from the GATT 1947, that in

conjunction with the other agreements in Annex 1A to the WTO agreement now represents the goods-

related obligations of WTO members.

The GATT 1947 is no longer in effect. However, it is still necessary to read it. Its successor, the

GATT 1994, is defined only by a brief agreement

1

 that, although entitled “General Agreement on Tariffs

and Trade 1994”, is little more than a series of references to other texts.

Most of the provisions of the GATT 1947 are included by reference, along with many other legal

instruments adopted by the GATT Contracting Parties and some new understandings and explanatory

notes.

The following pages attempt to make the GATT 1994 comprehensible by considering both the elements

that it shares with the GATT 1947, and also the ways in which the two agreements differ. For this

purpose, they look, first, at the core principles carried over into GATT 1994 from the GATT 1947, and

then at changes introduced by the agreement that defines the GATT 1994, as well as at the Uruguay Round

understandings which interpret specific points in certain GATT Articles.

Core principles of the GATT

The central principles common to the GATT 1994 and its predecessor are well known. They are so

important, however, that they must be recalled and briefly discussed. They are the 

most-favoured-nation

(

MFN

) rule, the principle of 

reduction and binding of national tariffs

, the rule of 

national treatment

,

and the 

prohibition — subject to defined exceptions — of protective measures other than tariffs

.

Two major exceptions to these central rules that have also been carried over into the GATT 1994 — the

provisions on regional trading arrangements and on restrictions to protect the balance-of-payments — will

be considered separately, in conjunction with the Uruguay Round understandings that have slightly

modified them.