The main role of GATT in international trade is regulating the contracting parties to achieve the purpose of agreement which was reducing tariffs and barriers and to achieve liberalisation in international trade. GATT was replaced by WTO in 1995.
THREATS FACED BY GATT :
1.It had no real enforcement mechanism.If bilateral agreement broke nothing will be done by GATT
2. The changing political sphere and economic policies around the globe may make GATT irrelevant with protectionist measures
3. Now world is moving to services sector but GATT is limited to products transaction
4. The multilateral negotiation rounds were influenced by the Western signatory states, the decision making right was major handled by the Western countries, especially United States.
RELEVANCE :
1. GATT reduced tariffs. This boosted world trade 8 percent a year during the 1950s and 1960s. That was faster than world economic growth. In the integrated, globalised world where bilateral relations are dependent on trade GATT is relevant
2. By increasing trade, GATT promoted world peace
3. it also tightens the rules that use to measure the export of developing countries, such as subsidies, anti-dumping duties, and safeguard measures.
4. It consists of 128 member countries and generates 80% of world trade which increases dependency and reduces war like situations and encourages countries to sit and speak. In modern times where military is adanced with technology this kind of agreements reduces such tensions
CONCLUSION:The purpose of GATT was to eliminate harmful trade protectionism.By removing tariffs, GATT boosted international trade. It restored economic health to the world after the devastation of World War II.
