ABSTRACT
The General Agreement on Tariffs and Trade (GATT) was formed by carving out and implementing the commercial-policy sections of the Havana Charter that was to have guided the International Trade Organisation. The narrow focus of the GATT served the process of trade liberalization well because the GATT's mission was simple and straightforward. The architects of the postwar international economic framework believed that trade liberalization had an important supporting role in achieving the principal economic goals of monetary stability and full employment. During 1860-1913, world trade relations centered on a network of bilateral trade treaties containing the most-favored-nation (MFN) clause. Each country was generally free to set and change its tariff code so long as it adhered to the most favored nation (MFN) clause. The first GATT negotiating round, held in Geneva in 1947, was a tremendous success. The 23 participating countries implemented tariff cuts and implemented those cuts on an MFN basis.
