A Comparison and Contrast of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)

GATT is a multilateral trade agreement aimed at increasing international trade while WTO is the only global organisation that deals with the rules....

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1.     Definition

GATT: It is a multilateral trade agreement aimed at increasing international trade.

WTO: It is the only global organisation that deals with the rules on trade between countries.

2.     Application

GATT: It applied to rules on trade in goods only.

WTO: It applies to rules on trade in goods, services and related aspect of intellectual property.

3.     Institutional Structure

GATT: It did not have a strong institutional structure.

WTO: It is more comprehensive and institutionalized. It has a secretariat, a ministerial conference and a general council.

4.     Main Objectives

GATT: To provides a stable and predictable basis for trade.

WTO: To be a negotiating forum, to help settlement of disputes and to provide a set of rules that govern trade policies and practices of member countries as provide in Article 3 of WTO.

5.     Package

GATT: It was a ‘a la carte’ system, that is, each obligation was a separate package. This reduced the predictability and uniformity of obligations.

WTO: It is a single package that is mandatory and binding on all members.

6.     Legal Basis

GATT: It has no legal basis or system that members could refer to, as the Havana Charter was never passed.

WTO: It has a legal basis as it is treaty. Treaties create law for all parties agreeing to their terms.

7.     Contractual Capacity

GATT: It has a limited contractual capacity to contractual nature to conduct internal reviews of members trade policies and to negotiate externally with other international organisation.

WTO: It has full contractual capacity, all privileges and immunity to exercise its function. It has the ability and mandate to develop relations with other international organisation. Through the TPRM it reviews and reports on trade policies and practices of the member states.

8.     Amendment

GATT: Its founders designed it to be difficult to amend.

WTO: Its annex structure allows for amendments, additions and subtraction to specific agreement more easily.

9.     Dispute Settlement (DS)


a.      DS was diplomatically based rules and procedures that evolved into a more judicially focused model during 47 years of the existence of GATT

b.     Panel legal decisions were outwardly become uneven in quality as the membership grew with no review.

c.      Members had the ability to block adoption of panel decision, the rejections increased as the membership grew.


a.     DS is binding and enforceable as provide in Annex 2 of WTO. It is broader, more efficient, predictable and reliable DS process guided by the rule of law.

b.     Panel legal decisions in WTO are reviewed by a standing appellate body

c.      WTO shifted to reverse consensus to eliminate members ability to block adoption of panel decisions.


1.     Use of Negotiations

They both use negotiations to develop the rules of the international trading system and liberalize trade.

2.     Accession

The process of accession remains the same in WTO as it was in GATT.

3.     Decision Making

They both use the consensus approach to decision making procedure. Although the WTO additionally allows for majority voting on one member one vote basis if consensus cannot be reached.

4.     Plurilateral (Optional Member) Agreements

The WTO in Annex 4 contained plurilateral agreement targeting few industries negotiated in GATT’s Tokyo Round. However as of today only two of the Plurilateral Agreements are active.

5.     Informal Consultation

They both utilize Informal Consultation in decision making. However, Informal Consultation in WTO has become controversial as it is democratic deficit and causes legitimate problems.

6.     WAIVERS

They operate on waivers. Waivers refer to permissions granted by WTO members that allow a member country not to comply with its normal commitments. Notably waivers in WTO and GATT were on temporarily basis under exceptional circumstances.

Don’t forget to leave a comment of the additional differences and similarities below.


Final Year Law Student, The University of Zambia

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