Difference Between Similar Terms and Objects

Difference Between WTO and GATT


It is okay to say that GATT, completely known as the General Agreement on Tariffs and Trade, and the WTO, World Trade Organization, are both different and the same in some aspects. Despite the fact that they are two distinct bodies that help regulate international trade and commerce, it is unquestionable that WTO came from GATT itself.

The WTO was actually formed in 1995 to monitor GATT’s provisions, and the members of the latter were all responsible for creating the WTO. Today, the WTO is constantly creating its own set of rules and regulations and acts independently from other organizations. The WTO is now recognized as the official body that governs the policies and standards of international trade. In fact, it oversees over 95 per cent of the trading around the globe (almost all the countries worldwide). This clearly excludes the giant, economic power of China. Perhaps this Communist country feels more at a disadvantage if they join the WTO.

Looking back at GATT, it was formed in 1948 to improve cross-country trading and help eradicate trade barriers through clear and sound negotiations. It was originally under the ITO (International Trade Organization), which was supported by the U.N. Because of the failure to ratify the ITO, GATT further evolved into what is now known as the WTO. Many have seen GATT’s weakness throughout its years of operations. For one, it has been criticized because of its lack of enforcement power which ended in so many disputes. Moreover, their provisions were more or less temporary in nature – a problem that is now addressed by the WTO in creating more stringent rules and permanent legal provisions.

By contrast, the WTO is a more effective organization because it is actively involved in dispute resolutions by accepting complaints and even imposing sanctions to the member at fault whenever it is deemed appropriate. Unlike GATT, they treat their trading partners as WTO members rather than naming them as simply contracting parties. They also widened the scope of trade by including not only goods but also intellectual property rights and even services.


1.The WTO is the newer, more effective, and more powerful organization that came from GATT itself.
2.The WTO has made an effective system of dispute resolution for any complaints or problems surrounding trade. As such, it can impose sanctions against the ill-performing WTO member.
3.The WTO recognizes participants in their trading as their actual members as opposed to GATT that simply acknowledged them as contracting parties.
4.The WTO has a broader scope of trade than GATT which now includes intellectual property rights and services on top of the standard trading goods.

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1 Comment

  1. very interesting organization

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