WTO and GATT – are they the same?


No. They are different — the WTO is GATT plus a lot more.


It is probably best to be clear from the start that the General Agreement on Tariffs and Trade (GATT) was two things: (1) an international agreement, i.e. a document setting out the rules for conducting international trade, and (2) an international organization created later to support the agreement. The text of the agreement could be compared to law, the organization was like parliament and the courts combined in a single body.

As its history shows, the attempt to create a fully fledged international trade agency in the 1940s failed. But GATT's drafters agreed that they wanted to use the new rules and disciplines, if only provisionally. Then government officials needed to meet to discuss issues related to the agreement, and to hold trade negotiations. These needed secretarial support, leading to the creation of an ad hoc organization — that continued to exist for almost half a century.

GATT, the international agency, no longer exists. It has now been replaced by the World Trade Organization.

The main differences

GATT was ad hoc and provisional. The General Agreement was never ratified in members' parliaments, and it contained no provisions for the creation of an organization.

The WTO and its agreements are permanent. As an international organization, the WTO has a sound legal basis because members have ratified the WTO agreements, and the agreements themselves describe how the WTO is to function.

The WTO has "members". GATT had "contracting parties", underscoring the fact that officially GATT was a legal text.

GATT dealt with trade in goods. The WTO covers services and intellectual property as well.

The WTO dispute settlement system is faster, more automatic than the old GATT system. Its rulings cannot be blocked.

GATT, the agreement, does still exist, but it is no longer the main set of rules for international trade. And it has been updated.

What happened? When GATT was created after the Second World War, international commerce was dominated by trade in goods. Since then, trade in services — transport, travel, banking, insurance, telecommunications, transport, consultancy and so on — has become much more important. So has trade in ideas — inventions and designs, and goods and services incorporating this "intellectual property".

The General Agreement on Tariffs and Trade always dealt with trade in goods, and it still does. It has been amended and incorporated into the new WTO agreements. The updated GATT lives alongside the new General Agreement on Trade in Services (GATS) and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The WTO brings the three together within a single organization, a single set of rules and a single system for resolving disputes.

In short, the WTO is not a simple extension of GATT. It is much more.

So, the GATT is dead, long live the GATT!

While GATT no longer exists as an international organization, the GATT agreement lives on. The old text is now called "GATT 1947". The updated version is called "GATT 1994".

Moreover, GATT's key principles have been adopted by the agreements on services and intellectual property. These include non-discrimination, transparency and predictability. As the more mature WTO developed out of GATT, you could say that the child is the father of the man.


Source: the World Trade Organization web site, URL: http://www.wto.org/.