The evolution of GATT, the General Agreement on Tariffs and Trade.

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Jesse Hamby

POSI 4359

As we look at the evolution of GATT, the General Agreement on Tariffs and Trade, we must understand what GATT really is. GATT was established to break down trade barriers (in the form of tariffs, quotas, preferential trade agreements between countries, etc) to make the flow of commodities and capital less restricted by national government influence.

There are many actors that play a role in how the system works. The United States assumed leadership as the worlds foremost economic and political power. The USSR wanted to play a role in jump-starting the European economy, and the U.S. was willing to help. The U.S. mindset was that by supporting trade they would be destroying Communism and eventually establishing democracy worldwide.

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When we think about one country supporting another country we assume that they will want a return on their investment. The U.S. opened it’s economy to Europe and Japan without demanding reciprocity. In the eyes of the U.S, by helping a country grow it would inturn profit America with out direct reimbursement. When the economy of a foreign country prospered they would consume more and require more trade, providing the U.S. with a stimulated economy.

When we look at GATT we look at large countries and small countries. The point of view of the two actors is that by ...

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