GATT vs GATS
If you have been following the process of dialogue on international trade that was set in motion by the UN in 1947, you are probably aware of GATT and GATS. These are agreements that pertain to trade in goods and services respectively to boost international trade. There are similarities in GATT and GATS though there are many differences that will be talked about in this article.
What is GATT?
It was at the behest of United Nations Conference on Trade and Employment that GATT (General Agreement on Tariffs and Trade) was instituted in 1947, and countries signing the agreement went through 8 grueling rounds starting in Geneva in 1947 to Doha in 2001 to agree on rules and regulations for international trade. These deliberations were a part to reduce tariffs and other duties to bolster international trade. When the participating countries could not come to grips with the idea of International Trade Organization, another body that was proposed by the US, the World Trade Organization came into effect in 1995 and replaced GATT. Today, more than 90% of international trade is being conducted under the guidelines of GATT that evolved over a period of nearly half a century. GATT has been responsible for reduction in tariffs all over the world and has led to a much higher volume of trade in goods.
What is GATS?
The creation of GATS took place in 1986. GATS stands for General Agreement on Trade in Services, and though it covers for a majority of trade internationally, it was surprisingly not a part of GATT for a number of years. But grievances of those trading in services could not be ignored for long with the result that GATS came into effect in 1995 in Uruguay round of GATT. The provisions of GATS are similar to those of its counterpart called GATT, but whereas GATT deals in trade in goods (merchandise), the provisions of GATS apply on trade in services.
Today, nearly all members of WTO are also members of GATS and follow the guidelines issued to the member countries.
What is difference between GATT and GATS?
• GATT was General Agreement on Tariffs and Trade whereas GATS is General Agreement on Trade in Services
• While GATT pertained to trade in merchandise only, GATS applies to trade in services
• It was in Uruguay round of GATT in 1995 that GATS finally came into existence.