What is the role of GATT and the World Trade Organization in international trade?

Question

What will be an ideal response?

Answer 1

In 1948, when 23 contracting countries signed the General Agreement on Tariffs and
Trade (GATT), their objective was to reduce import tariffs. This was considered a milestone in international trade relations. GATT is based on three principles. The first concerns nondiscrimination, wherein each member country must treat the trade of all other member countries equally. The second principle is open markets, which are encouraged by the GATT through a prohibition of all forms of protection except customs tariffs. Fair trade is the third principle, which prohibits export subsidies on manufactured products and limits the use of export subsidies on primary products. In reality, none of these principles is fully realized as yet, although much progress was made during the Uruguay Round on issues such as nontariff barriers, protection of intellectual property rights, and government subsidies.
Another major breakthrough at the Uruguay Round was the establishment of the World Trade Organization (WTO) in 1995, which replaced GATT. In contrast to GATT, which was more loosely organized, WTO as a permanent institution is endowed with much more decision-making power in undecided cases. These extended competencies have become manifest in visible consequences. During its 50 years of existence, only 300 complaints in international trade disputes were filed with GATT; since its installation in 1995, the WTO has already dealt with 200 cases.