What is difference between Free trade (GATT) and Globalization?

Discussion in 'Economics & Trade' started by afghani, Feb 10, 2012.

  1. afghani

    afghani New Member

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    What is difference between Free trade (GATT) and Globalization?

    This thing has confused me :love::-o
     
  2. Reiver

    Reiver Well-Known Member

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    Globalisation, being a rather general political economic term, not surprisingly has mulltiple definitions. GATT, however, is just a multilateral trade agreement. Technically multilateralism is distinct from globalisation. For example, GATT allowed for preferential trade agreements. At best, such agreements restrict globalisation by allowing for trade discrimination (e.g. Different tariffs between member and non-members such that trade is inefficiently diverted). At worst, given regionalism, it is an open assault on globalisation

    GATT was supposed to be a stopgap as we waited for the ITO to be formed. This would have had economic development as a core interest, which really is a basic requirement for globalisation (as dynamic comparative advantage is enabled such that trade is maximised)
     

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