The General Agreement on Tariffs and Trade(GATT) is a binding contract between 103 governments whose objective is to promote trade among members. GATT members include developing nations(constituting over two-thirds of membership), all of the Organization for Economic Cooperation and Development(OECD), central and eastern European countries , plus 29 observer countries who apply GATT rules on a defacto basis. GATT negotiators opened the world to merchandise trade, and tariffs fell from an average of 40 percent in 1945 to 5 percent today. Tariff reductions resulted in a termendous growth in trade. Between 1945 and 1975, the volume of trade expanded by roughly 500 percent. With tariffs on goods greatly reduced, attention has turned to other impediments to trade.
Since 1986, the GATT has been conducting the largest trade negotiations ever. In these negotiations the Uruguay Round discussions are focused on nontariff measures that restrict or distort trade, agricultural trade policy, trade in services, protection of intellectual property, and reductions in restrictions on foreign investment. The key to this round has been the subsidy-and-quotaridden trade in food, which has developed outside the multilateral framework. Affluent countries protect and subsidize farm production. The surplus output is later sold at artificially low prices.