General Agreement on Tariffs and Trade Article 6: Understanding Its Significance

The General Agreement on Tariffs and Trade (GATT) is a treaty that was established in 1947 to promote international trade by reducing trade barriers such as tariffs and quotas. GATT was a success and helped increase global trade significantly. In 1995, it was replaced by the World Trade Organization (WTO), but the principles of GATT continue to be used in setting global trade rules.

One of the key provisions of GATT is Article 6, which concerns the rules of origin for goods. This provision is crucial for determining the country of origin for goods, which is important for trade negotiations, customs duties, and other trade-related regulations.

Article 6 defines the criteria that must be met for a product to be considered as originating from a particular country. This includes the following:

– The product must have been wholly obtained or produced in the country of origin

– The product must be partially produced or obtained in the country of origin, with a certain percentage of the value added in that country

– The product must have undergone substantial transformation in the country of origin

These criteria are intended to prevent countries from simply re-packaging products from other countries and claiming them as their own for trade purposes. By setting clear rules of origin, Article 6 helps ensure that trade flows smoothly and that each country receives the appropriate customs duties for imported goods.

One of the key benefits of Article 6 is that it helps prevent disputes between countries over the origin of goods. If two countries both claim the origin of a particular product, it can lead to lengthy legal battles that disrupt trade and harm both countries` economies.

By setting clear rules for determining the origin of goods, Article 6 helps prevent these disputes from arising in the first place. This helps ensure that trade flows smoothly, and that countries can focus on other important issues related to international trade.

Overall, General Agreement on Tariffs and Trade Article 6 is a crucial provision for international trade. By outlining clear rules for determining the origin of goods, it helps ensure that trade flows smoothly and that disputes are minimized. As such, it is an important component of the global trade system and continues to shape trade policies around the world.