DIFFERENCES:
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)
GATT:
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.
WTO:
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.
SIMILARITIES:
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.