Key Difference: The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. It was created in 1948 and lasted until 1993. World Trade Organization (WTO) was formed as a replacement for GATT in 1995 with the purpose of supervising and liberalizing international trade. WTO has a more permanent structure compared to GATT. WTO also monitors trade in services and trade-related aspects of intellectual property rights, in addition to trade in goods.

There are various bodies or agreements that have been made around the world in order to maintain peace and justice among the different countries. The main purpose of such bodies is to regulate talks, trade and other rules and regulations among the different countries of the World. The most popular bodies are the United Nations and the World Trade Organization. Though there are a few similarities between the GATT and the WTO, they are distinctly different from each other.

The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. It was created in 1948 with a purpose of “substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.” It was originally placed under the ITO (International Trade Organization), which was supported by the United Nations (UN). When the ITO failed to ratify, GATT evolved into the World Trade Organization (WTO). There a few major flaws in the GATT structure such as not enough enforcing power, which led to many disputes among the members. Also, the rules and regulations that were created under GATT were temporary in nature.

World Trade Organization (WTO) was formed as a replacement for GATT in 1995 with the purpose of supervising and liberalizing international trade. The organization deals with regulation of trade between participating countries, it also provides a framework for negotiations and formalizations of trade agreements. It is also responsible for enforcing trade laws, agreements and resolving disputes. The WTO was created with the purpose of being a stronger and having a more permanent framework compared to the previous GATT. It also monitors trade in services and trade-related aspects of intellectual property rights, in addition to trade in goods. The WTO has a total of 157 member countries.

Image Courtesy: gatt-archive.stanford.edu, economistindia.files.wordpress.com