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The GATT is a policy framework for negotiations to open (liberalize) national markets established in 1947after the Second World War.

It was built around 4 general principles that every country was expected to accept:

  1. Transparency: economic protectionism should take the form of tariffs (ie. taxes on imports).
  • non-tariff barriers to trade are not allowed.

  • Prohibited export-subsidies.

  1. Reciprocity: If one country lowers its tariffs against anothers exports, there should be matching reductions by the other member.

  2. Non-discrimination: no country should grant preferential treatment to another country, or group of countries.
  • Parties to the agreement have to extend to each other the most favourable terms negotiated with any trading partner.

  1. Ongoing Negotiation: members agree to periodic multilateral negotiations on tariff reductions.

The GATT reduced tariff through successive rounds of multilateral trade negotiations (eg. Kennedy Round 1963-1967; Tokyo Round 1974-1979; Uruguay Round 1986-1993).

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