The upcoming discussion will update you between distinguish between GATT and WTO.

We have said that there are many international organisation that govern trade.

The General Agreement on Tariffs and Trade (GATT) came into operation in 1948 with the aim of liberalizing trade.

The international trading system since then was guided by the rules and procedures of the GATT till 1994.


The GATT was transformed into the World Trade Organisation on January 1995. In fact, prior to 1994 there was as such no international or multilateral trade organisation that addresses all the tissues relating to trade.

GATT, the organisation is now dead and the WTO is now functioning with the adjective of promoting the liberalisation of world trade. It formulates rules of trade in such a way that the process of globalisation becomes easier—the idea is to create a ‘global village’. Like the IMF or the World Bank, GATT did not have any international status. As an international organisation, WTO differs from its predecessor, the GATT, in many respects.

These are:

First, the number of member cerentries of the WTO is larger. At present (July 2008), it has 153 members.


Secondly, GATT was ad hoc and provisional. The WTO is a permanent organisation having sound legal basis.

Thirdly, the area of business of the WTO is more widespread than the GATT. The WTO facilitates the implementation, administration and operation of multilateral and plurilateral trade agreements especially concerning services, protection of intellectual property rights, etc.

Fourthly, the WTO is a more powerful body than the GATT as the former operates with better rules and enlarged functions than the latter.

Fifthly, the dispute settlement under the WTO is faster than the GATT.


Sixthly, although GATT recommended protection in smaller doses for very few sensitive commodities, the WTO is totally committed to the removal of any kind of protection and subsidy. It also aims at trading reforms of agricultural commodities.

On the whole, one can say that the ‘WTO is GATT plus a lot more’. The WTO acts as a watchdog of trade expansion. If any dispute or conflict arises between nations concerning trade, the WTO intervenes. It performs advisory role. It aims at preventing protective policy at any cost.