Get to know the vital terms of Logistics and Supply Chain Management.
The general agreement on tariffs and trade, or an international agreement first met in 1947, is colloquially known as GATT. GATT substantially influences logistics and global supply chains. The treaty outlines the general principles of international trade. In fact, GATT offers tariffs and other trading barriers among member countries to be reduced. This agreement spawned the WTO and continues to influence logistics operations around the world.
GATT is a three-letter abbreviation for the general agreement on tariffs and trade, and it was formed a long time ago to initiate global trade through the abolition of restrictive trade policies. It established international rules on trade, particularly in reducing tariffs and other barriers to free-flowing goods. For logistics, that meant easier access to world markets, cheaper crossing-shipping costs, and a more predictable trading climate.
GATT has profoundly been felt in logistics. With free trade, there is easy movement of goods across borders as it evades complexities associated with international shipping. GATT has also led to increased competition which translates to lower costs during the transportation and customs phases. This goes with a greater trade relationship among the different countries as well as reduced logistical complications across different regions.
Although the WTO has replaced GATT since 1995, these principles are widely applied to date. Their legacy guides international trade policy for logistics providers handling complex international markets more easily. Even to this day, it acts as the foundation for negotiation in trade otherwise, structures of tariffs and trade routes would have been quite different.
GATT is arguably the great cornerstone in the shaping of global trade and logistics. It reduced and remains to cut barriers to trade and promote free trade, thus contributing to more cost-effective and efficient international logistics operations. Indeed, its impact continues to be felt in today’s interlinked global supply chains.