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

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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. ...read more.


But the truth is that the large, productive nations have a great deal to gain with foreign markets lowering tariffs, while poor nations have little to gain when the markets of the wealthy are already dominated by local producers, while their own markets at home are flooded by the wealthy nations. Not all large countries always benefit, the United States ran into a few problems in its attempts to aid other countries. Countries like Japan were exporting more than they were importing at a drastic rate, and were beginning to dominate the world market. In 1985 Japan was the second largest market economy in the world. Japan had a high savings rate and the U.S. ...read more.


It is just very difficult to predict what is going to happen, any argument can be shot down when dealing with social choice. You can predict what you think one country will do based on what they have done in the past, but you can not know for sure. An example is the soldiers dilema; when two soldiers are seperated and intrrogated thay assume that the the one will not talk and vice versa, but because they are seperated they don't actually know what the other is doing. This example just goes to show that even with the actors hoping to read the other actors, they can never really know what is going to happen, therefor there is no security in GATT or any other system, you just have to allow tha actor to pursue their own intersets and hope they coincide with yours. Jesse Hamby POSI 4359 ...read more.

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