What Was the General Agreement on Tariffs and Trade (GATT)?
In 1945, the United States initiated the creation of a multilateral international organization that would establish rules of procedure for handling international commercial policy and provide a forum for negotiations. The International Trade Organization (ITO) was set up at a conference in Havana, Cuba. After the U.S. Congress failed to ratify the charter, the United States and other major trading nations entered into the General Agreement on Tariffs and Trade (GATT) in 1947. For more than four decades GATT, which incorporated most of the major principles of the ITO, was the framework within which all multilateral trade negotiations took place. More important than any of the individual rules was GATT’s underlying philosophy, built around the concept that the free market works and that the objective of international trade policy should be to reduce trade barriers (Sorenson, 1975). Discussions of issues were conducted through rounds of negotiations. For example, the Dillon Round (1961-62
