The General Agreement on Tariffs and Trade (GATT) was a treaty created in 1947 with the goal of promoting international trade by reducing or eliminating trade barriers such as tariffs, quotas, and subsidies. GATT`s successor, the World Trade Organization (WTO), was created in 1995, but GATT`s principles remain the foundation of the WTO`s trade agreements.
Article 1 of the GATT is one of its most important provisions. It outlines the basic principles upon which the agreement is based, including the principle of non-discrimination, the principle of reciprocity, and the principle of transparency.
The principle of non-discrimination, also known as the most-favored-nation (MFN) principle, requires member countries to treat all other members equally in terms of trade. This means that any advantage given to one member country must be extended to all other member countries. For example, if a member country reduces tariffs on imports from one country, it must also reduce tariffs on imports from all other member countries.
The principle of reciprocity requires member countries to give each other similar treatment in terms of trade. This means that any concessions made by one member country must be reciprocated by other member countries. For example, if a member country agrees to reduce tariffs on imports from another member country, that other member country must also reduce tariffs on imports from the first member country.
The principle of transparency requires member countries to provide information about their trade policies and practices. This means that member countries must publish their trade regulations, provide explanations for any changes in their policies, and consult with other member countries about any changes that may affect them.
While Article 1 of the GATT may seem like a dry and technical provision, it is essential to the functioning of international trade. By establishing basic principles of non-discrimination, reciprocity, and transparency, the GATT ensures that member countries can trade with each other on a level playing field. This, in turn, promotes economic growth, creates jobs, and increases prosperity worldwide.