General Agreement on Tariffs and Trade

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Publication.png General Agreement on Tariffs and Trade 
Interest ofAlonzo McDonald

General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." It was negotiated during the United Nations Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organisation (ITO). GATT was signed by 23 nations in Geneva on 30 October 1947 and took effect on 1 January 1948.[1]

GATT discussions continued under the auspices of the United Nations Conference on Trade and Development (UNCTAD) until the signature by 123 nations in Marrakesh on 14 April 1994 of the Uruguay Round Agreements, which established the World Trade Organization (WTO) on 1 January 1995.[2]


In his 1994 book The Trap, James Goldsmith was highly critical of globalisation in general and GATT in particular:

"...forty-seven Vietnamese or forty-seven Filipinos can be employed for the cost of one person in a developed country like France" (p. 26) of the characteristics of developing countries is that a small handful of people control the overwhelming majority of the nation's resources. It is these people ... who assemble the cheap labour which is used to manufacture products for the developed world. Thus, it is the poor in the rich countries who will subsidise the rich in the poor countries (p. 37)."

The adoption of global free trade would therefore be utterly disastrous for the middle- and working-classes of the West, as the transnational corporations simply move their production operations offshore. But the poor of the less-developed world would not benefit much, either.

The GATT's effect on agriculture in the Third World will be even more disastrous, according to Goldsmith:

"It is estimated that there are still 3.1 billion people in the world who live from the land. If GATT manages to impose worldwide the sort of productivity achieved by the intensive agriculture of nations such as Australia, then it is easy to calculate that about 2 billion of these people will become redundant. Some of these GATT refugees will move to urban slums. But a large number of them will be forced into mass migration (p. 39)."

The alternative Goldsmith proposes is regional free trade blocs, between countries that are roughly equivalent in development. He also endorses a variant of the free movement of capital (but not of products), e.g. that Japanese firms that want to sell products to Europe would be required to establish their businesses in Europe, thus benefiting European workers. However, he also warns about the dangers of countries having excessive foreign debt-obligations, citing The Economist and a Washington Post editorial.[3]

Interviewed for nearly an hour by American talkshow host Charlie Rose in 1994, Goldsmith who represented France as a Member of the European Parliament discussed the ramifications of free-trade agreements that were then taking place (GATT and NAFTA) and correctly predicted many of the things that would happen to the global economy in the 21st century.[4]

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  1. World Trade Organisation: "WTO legal texts"
  2. "General Agreement on Tariffs and Trade 1994"
  3. "The Trap" by Sir James Goldsmith, 14 November 1994
  4. "Charlie Rose: Sir James Goldsmith Interview" 15 November 1994