It is easy to confuse between GATT and WTO and even fail to point out the key difference. GATT was created in 1948 and it stands for General Agreement on Tariffs and Trade (McCormick 15). The World Trade Organization (WTO) later replaced it. When concentrating on various scope, structures, focus, and practices of the two organizations we can clearly identify the similarities and differences (Lal 14).
GATT is a bilateral trade agreement with the power to control the trade bylaws of its member governments. It is an international treaty, and it has no authority over public corporations, private firms, or individuals. Relatively, it governs the relations of countries that willingly consent to abide by its laws (Gilpin 3). On the other hand, WTO is an international organization intended to oversee and liberalize international trade. WTO is member driven, and it operates on consensus. Moreover, WTO is widely viewed as a successor of GATT. WTO deals with rules and organizations between nations and it is a better form of GATT (Lal 5). There are numerous similarities between the WTO and the GATT. They have the same fundamental principles, which are safety valves, transparency, commitment, enforceable, reciprocity, and non-discrimination.
There are many differences between WTO and GATT too. Primarily, the WTO deals with trade in intellectual property and services while GATT deals with trade in goods. Secondly, GATT was provisional. Moreover, it contained no requirements for the formation of an organization and its contracting parties never endorsed the General Agreement, while WTO has a clear legal basis because all the members have approved WTO agreement, which describes how it functions, and the agreements of WTO are permanent. Next, the dispute settlement system of WTO is more efficient compared to that of GATT (Gilpin 9). Additionally, WTO has brought about a trade policy evaluation system that enhances the transparency of practices, trade policies, and members. Lastly, GATT had contracting parties while WTO has members. Furthermore, the WTO regulative program is complemented with some distributive elements; hence, just to a small percentage a result of international organization itself (McCormick 32).
In conclusion, without GATT and WTO, it would be difficult to reach agreements regarding trade and tariffs (Gilpin 11). There would be no organization to operate international trade negotiations in the global forums either. Therefore, there are many similarities and differences between WTO and GATT as highlighted in the essay.
Works Cited
Gilpin, Robertson. Global Political Economy- Understanding the International Economic Order. Princeton: Princeton University Press, 2011. Print.
Lal, Das. Difference between WTO and GATT. New York: Longman, 2014. Print
McCormick, Robert. The Systems Encouraging Good Governance. New York: Vintage aBooks, 2006. Print.
