In 1995, the General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO). This change marked a major shift in global trade relations and has had a significant impact on the world economy.
GATT was originally created in 1947 with the goal of reducing trade barriers and promoting free trade among its member countries. Over time, GATT helped to reduce tariffs and other trade barriers, leading to increased global trade and economic growth.
However, by the 1980s, it became clear that GATT was no longer able to address the complexities of international trade. As the global economy became more interconnected and diversified, GATT struggled to keep up with the changing landscape of trade relations.
To address these challenges, negotiations began in 1986 to create a new international trade organization that would be better equipped to handle the complexities of global trade. After years of negotiations, the WTO was founded in 1995, replacing GATT as the primary international organization responsible for regulating global trade.
The WTO is responsible for a range of functions related to international trade, including negotiating trade agreements, monitoring compliance with those agreements, and resolving disputes among member countries. The organization has 164 member countries and plays a critical role in shaping international trade policies and practices.
One of the key differences between GATT and the WTO is that the WTO has a broader mandate to address trade issues beyond just tariffs. For example, the WTO has established rules and guidelines around intellectual property rights, agriculture subsidies, and service sector trade.
The establishment of the WTO has had a significant impact on the global economy. While some critics argue that the organization has prioritized the interests of wealthy countries over developing nations, others view it as a critical tool for promoting economic growth and reducing poverty.
Overall, the replacement of GATT with the WTO represented a major shift in global trade relations and has had a lasting impact on the world economy. As the global economy continues to evolve, it remains to be seen how the WTO will continue to adapt to new challenges and opportunities in the years ahead.