Definition of 'General Agreement On Tariffs And Trade - GATT'

A treaty created following the conclusion of World War II. The General Agreement on Tariffs and Trade (GATT) was implemented to further regulate world trade to aide in the economic recovery following the war. GATT's main objective was to reduce the barriers of international trade through the reduction of tariffs, quotas and subsidies.

Formed in 1947 and signed into international law on January 1, 1948, GATT remained one of the focal features of international trade agreements until it was replaced by the creation of the World Trade Organization on January 1, 1995. The foundation for GATT was laid by the proposal of the International Trade Organization in 1945, however the ITO was never completed.

Purpose of GATT is to facilitate international trade by freezing and reducing tariff levels on cross-border traded commodities. The initials GATT stand for 'General Agreement on Tariffs and Trade'. The organisation was established in the year 1947.