What is the Difference Between GATT and WTO?

International organisations are usually established by a treaty or other instrument recognised by international law. They are comprised of member states and sometimes may also include additional entities which form these organisations. The very first international organisation to address international issues was the League of Nations. It was the first intergovernmental organisation that was formed with the main mission of maintaining world peace. It was founded in 1920 after the Paris Peace Conference which was followed by the First World War. Its primary goals were preventing wars through the concept of collective security, settling international disputes and disarmament. The League of Nations came to an end on 20 April 1946.

After the Second World War and the failure of the League of Nations to prevent another world war, the United Nations was formed. Just like the League of Nations, its aim was to maintain international peace and security, achieving international cooperation and harmonising nations. The headquarters of the UN is in New York. With time there have been several new objectives that have come up like delivering humanitarian aid and promoting sustainable development. Currently, there are 193 member states to the UN. The organisation is financed by the contributions of the member states which are made voluntarily. Under the UN there are several agencies that work towards the greater goals of the UN like World Bank, UNICEF, International Trade Organisation, UNESCO etc. 
 

GATT - The General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade is a legal agreement that was the outcome of the failure of negotiations during the United Nations Conference on Trade and Employment which was held to create the International Trade Organisation (ITO). The participating nations came together to promote international trade through the means of reduction of trade barriers like tariffs, custom duties etc. It was first signed by 23 nations in Geneva in 1947. There were some provisions which were made that made GATT distinct from other agreements:

1. When the issue of tariffs arose then all the member nations were deemed to be equals

2. It prohibited the restriction of exports and imports as the goal was to promote international trade which was subject to some exceptions.

3. There was a focus on developing nations and special provisions were made for that.

The GATT remained in effect until 1995 when the World Trade Organisation came into existence and acted as a successor of GATT.
 

WTO - World Trade Organisation

World Trade Organisation is an international organisation that regulates and encourages international trade and aids in resolving international trade disputes. It started functioning in 1995. It was a product of the Uruguay Round Agreements. It has developed to be the largest international economic organisation with 164 member states since the Second World War. It is headquartered in Geneva, Switzerland. It has been very successful in prohibiting discrimination between trading partners, eliminating tariffs, dealing with environmental issues, national security and increasing the overall global GDP. All the decisions of the WTO are taken by a consensus. It is aimed at promoting the liberalization of trade which benefits globally.
 

Difference between GATT and WTO

1. GATT was a mere set of rules which had no institutional foundation. It was a multilateral agreement with a small functioning associate secretariat. The WTO on the other hand is a global body that has a permanent institution along with a secretariat.

2. GATT was an ad hoc provisional agreement. WTO has goals and existence that are full and permanent.

3. The nations that participated in GATT were called contracting parties. The members of WTO are called member states.

4. GATT was only applied to goods that were merchandised. WTO not only covers goods but also services in trade which includes aspects of intellectual property.

5. GATT was less powerful and the participating countries did not pay much heed and attention to it. It also had a very slow and inefficient dispute resolution system which made the countries not take it seriously. The WTO holds a lot of power and accounts to near about 96% of the global GDP. It has a much faster and efficient dispute settlement department.

6. GATT was initially very selective in nature and it was much later in the 1980s when the notion of plurilateral nature of agreements was added. From the very get-go the WTO involves memberships and commitments which are multilateral in nature.

7.  Under GATT domestic legislation could continue even if it violated agreements. This is not permissible by the WTO.

8. GATT was only signed by 23 nations whereas WTO has 164 member states who collectively work towards international trade.

Hence, we can tell that the WTO has made significant contributions and changed the whole notion of international trade to a more collective economic sound idea which has later facilitated globalisation.