GATT
The 1947 treaty that cut tariffs through negotiating rounds and became the free-trade backbone of the postwar order, evolving into the WTO.
In the 1930s, as the Great Depression deepened, governments tried to save themselves by taxing everyone else's exports. The United States raised duties on thousands of goods with the Smoot-Hawley Act of 1930; its trading partners retaliated in kind; world trade collapsed by roughly two-thirds within a few years. The lesson the postwar planners drew was blunt: 'beggar-thy-neighbor' trade wars had helped turn a slump into a catastrophe and a catastrophe into a war. Their answer, signed by 23 countries in Geneva in 1947, was the General Agreement on Tariffs and Trade, the modest-sounding treaty that became the backbone of half a century of open commerce.
How it worked
GATT was supposed to be temporary, a stopgap until a grander International Trade Organization was ratified. That body died in the U.S. Senate, and the 'provisional' GATT ended up governing world trade for 47 years. It was less an organization than a rulebook and a permanent negotiation. Its central principle was non-discrimination, the 'most-favored-nation' rule: a tariff cut you granted one member you had to grant to all of them, so concessions spread automatically across the system. Members then met in 'rounds', drawn-out bargaining sessions in which they traded tariff reductions product by product. It worked. Average tariffs among the major industrial economies fell from around 22 percent in 1947 to single digits by the 1990s, and world trade grew faster than world output for decades, knitting together the postwar boom.
The big rounds
The early rounds were mostly about tariffs; the later ones grew far more ambitious. The Kennedy Round (1964 to 1967) cut industrial tariffs across the board. The Tokyo Round (1973 to 1979) took on non-tariff barriers, the subtler protectionism of subsidies and standards. The Uruguay Round (1986 to 1994) was the giant: it dragged agriculture, textiles, services, and intellectual property into the rules, and it created a permanent institution to enforce them. On January 1, 1995, the World Trade Organization replaced the GATT, inheriting its agreements and adding a binding dispute-settlement system with real teeth.
The system under strain
For decades 'GATT/WTO' was shorthand for the rules-based trading order, one of the load-bearing pillars of the American-led postwar system alongside the IMF and the World Bank. That order is now under visible strain. The WTO's negotiating arm has been stalled since the failed Doha Round; its top appeals court was hollowed out after Washington blocked the appointment of new judges; and great powers increasingly reach for tariffs and 'national security' exceptions the old system was designed to prevent. When a modern government slaps duties on a rival's steel or microchips, it is picking a fight with the ghost of 1947, and with the hard-won memory of what happened the last time the world's economies stopped trading and started retaliating.