General Agreement on Tariff and Trade (G.A.T.T.) was a global organisation set up in 1948.In all 118 countries in the World were members of the GATT,and India was one of the founder members of it.
Many countries in the World,especially underdeveloped countries,were facing problems of deficit in their balance of payments accounts because none of the developed countries allowed free imports from developing countries.Tariff and non-tariff barriers to trade reduced the volume of World trade.
GATT was set up with a single major objective of creating a global environment of free trade.Efforts were made to persuade developed nations to cut down their tariff rates on imports from developing nations.However,the role of GATT had been in the capacity of an advisory body.No legal powers were vested in GATT to enforce the resolutions passed by the general body of the GATT.Eight rounds of trade negotiations of the GATT were held at different locations around the World.But it failed to bring about changes in the barriers to free trade.
Failure of 8th round of GATT held in Uruguay at **** del Este in 1986,known as 'Uruguay Round' gave birth to the new organisation and a legal entity called as 'World Trade Organisation'(WTO).WTO came into force on January 1,1995.India,once again,became the founder member of WTO also.WTO is a permanent organisation having legal status.Unlike UNO,all member countries of the WTO have equal rights of voting and negotiating.Objectives of WTO,though more or less similar to GATT,have wider scope and the powers to enforce its decisions,which was not the case with GATT.WTO provides the framework for implementation,administration and operations of the plurilateral trade agreements.
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