ABSTRACT
The greater the difficulties that are found to exist in the way of further steps towards liberalizing world trade through such general arrangements as those under the General Agreement on Tariffs and Trade ('Gatt'), the greater the attention that is likely to be given to the liberalization of trade among groups of countries. The reduction of tariffs on trade among a limited number of countries is permitted under Gatt, if they are aimed either at complete customs unions, members of which set up a common tariff against goods from the rest of the world (which is supposed to be no higher than the average of its members' previous tariffs) and remove tariffs on their mutual trade; or if they are aimed at setting up free trade areas, members of which retain their individual tariffs on goods from the rest of the world, whilst liberalizing 'substantially all' their trade among themselves.
