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way, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom
and United States.
Objectives of GATT
The basic objectives of GATT have been:
1. To provide a framework for the conduct of trade relations.
2. To reduce (and progressively eliminate) trade barriers and dis-
crimination in international trade.
3. To resolve disagreements through consultations.
4. To provide a set of rules (codes of conduct) that would inhibit the
member nations from taking unilateral action.
5. To increase the level of productivity with a view to increase em-
ployment in the member countries.
6. To expand world resources and make better utilization of world's
resources.
7. To increase standard of living of the global population.
Principles NPP
There have been three main principles of GATT:
1. Non-Discrimination: This has been the basic principle of GATT
contained in Article I enshrined in the so called MFN (most favoured na-
tion) clause. MFN obligation means that any advantage, favour, privilege,
or immunity granted by any contracting party to any product originating in
or destined for any other country shall be accorded immediately and un-
conditionally to the like product originating in or destined for the territories
of all other contracting parties.
MFN implies that each nation shall be treated as well as the most
favoured nation, i.e., if any country gave preferential tariff access to any
other country (so that the latter becomes the most favoured nation) then
that concession was to be extended immediately to all other countries,
so that all contracting parties benefit to the same extent. The contracting
parties confirmed that they would not change their policy except under
such circumstances as were allowed by the GATT procedures. This was
an extremely important provision as it meant that member countries could
not increase tariffs selectively.
2. Reciprocity: Reciprocity was never formally defined but never the
less remained a cornerstone of GATT negotiations. The reciprocity obliga-
tion required that a country receiving a concession from another was to
offer an 'equivalent' concession in return. In its most simple form reciproc-
ity might involve two countries agreeing tariff reductions on each other's
exports that would leave their bilateral balance of trade unchanged.