General Agreement on Customs and Trade Tariffs (GATT) are the different negotiations and agreements that countries periodically carry out to reduce tariffs on a global and bilateral level on certain products.
This nomenclature, GATT, refers to the English name of the General Agreement on Tariffs and Trade, and was created in 1994 as one of the forms of gradual reduction of international tariffs at a point where international trade and liberalizations were booming under cover of the fall of the Soviet bloc and the internationalization of developing economies
The origin of the GATT is after World War II, when the United States and 22 other countries decide to establish agreements and regulations on the transactions of certain basic and vital products for these economies. Subsequently, and under the protection of the World Trade Organization (WTO) , it was decided to open the range of participating countries and a formality was established before various organizations the negotiations resulting from these agreements.
How does GATT work?
The way GATT operates has evolved over the past 20 years, until the agreements are multilateral and mandatory.
Meetings are held annually in which some countries present their proposal to withdraw tariffson products, since they are the most interested in having their products or those of which they have surpluses, be marketed in other countries and given an adequate exit .
The rest of the countries, in turn, present other proposals on other products in which they are interested, and based on this and on domestic and international analysis, an agreement is reached on the type of tariff to be imposed or directly the absence of these.
Naturally, each country will fight for the rest of the countries to lower tariffs on their products, and in turn these countries will have to do the same with other products, even with the disadvantage that their products cannot compete with foreign products. A country may also be interested in lowering tariffs on certain imports due to the absence of such products or that are of a worse quality.
GATT agreements have been seen as the beginning of the international liberalization of the 1990s, and also the result of relocation and detriment of industry in the West, which has led to a gradual deterioration of the middle class and reduction of purchasing power .