Article 5 of the General Agreement on Tariffs and Trade (GATT) is an essential provision that outlines the principle of Non-Discrimination in trade. It states that member countries must not discriminate against other member countries regarding imports and exports. In other words, no country should receive any advantages or disadvantages in international trade.
The GATT was signed in 1947, and it became the foundation for international trade. The agreement was signed by 23 countries, and since then, it has been expanded to include 164 member countries. The agreement has been revised several times, with the most recent being the Agreement on Trade Facilitation signed in 2013, which aims to make trade simpler, faster, and more transparent.
Article 5 of the GATT is significant because it ensures that each member country is treated equally in international trade. It prohibits any discrimination between countries that could give one an unfair advantage. This article emphasizes the importance of nondiscriminatory trade policies that boost world trade and economic growth.
According to Article 5, member countries should not impose tariffs, regulations, or any other barriers that discriminate against other member countries. It also states that trade policies should not be applied in a manner that discriminates against imports or exports from other countries.
The principle of non-discrimination is further divided into two categories: Most-Favored-Nation (MFN) treatment and National Treatment.
MFN treatment means that any advantage given to one country in terms of tariffs or trade policies should be given to all member countries. For instance, if a country is granted a low tariff rate, every member country should receive the same tariff rate.
National treatment requires that foreign goods and services receive equal treatment as domestic goods and services. In other words, imported goods and services should not be discriminated against in terms of regulations, taxes, or any other trade barriers.
The importance of Article 5 in trade cannot be overstated. It ensures that fair trade policies are implemented, which benefits every member country. This article keeps countries accountable and encourages them to maintain non-discriminatory trade policies, which, in turn, leads to a more prosperous global economy.