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WTO vs GATT: Main Differences

2007-10-23 Source:WTO: A Teaching Course

For several decades, the General Agreement on Tariffs and Trade was applied on a provisional basis. It was a multilateral agreement containing rules relating to trade in goods, and although it operated like a permanent agreement, it was without a permanent institutional framework, and was serviced by an ad hoc Secretariat. The WTO now provides a permanent institutional framework for the multilateral trading system, with its own Secretariat. In addition, the WTO not only covers trade in goods, as the GATT rules did, but also trade in services and trade-related aspects of intellectual property rights. Also, the dispute settlement mechanism has been considerably strengthened in the WTO.

3.1 Nature

The GATT was a set of rules, with no institutional foundation, applied on a provisional basis. The WTO is a permanent institution with a permanent framework and its own secretariat.

3.2 Scope

The GATT rules applied to trade in goods. The WTO Agreement covers trade in goods, trade in services and trade-related aspects of intellectual property rights.

3.3 Approach

Whilst the GATT was a multilateral instrument, a series of new agreements were adopted during the Tokyo Round on a plurilateral-that is, selective-basis, causing a fragmentation of the multilateral trading system. The WTO has been adopted, and accepted by its Members, as a single undertaking: the agreements which constitute the WTO are all multilateral, and therefore involve commitments for the entire membership of the organization.

3.4 Dispute settlement

The WTO dispute settlement system has specific time limits and is therefore faster than the GATT system; it operates more automatically, thus ensuring less blockages than in the old GATT; and it has a permanent appellate body to review findings by dispute settlement panels. There are also more detailed rules on the process of the implementation of findings.

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