The General Agreement on Tariffs and Trade (GATT) was a landmark multilateral treaty signed by a group of nations to foster international trade by reducing barriers and streamlining economic activities. The agreement aimed to create a level playing field for all trading partners by removing tariffs and other trade barriers that hindered the growth and expansion of commerce.

The GATT was signed in 1947, after three years of negotiations, and went into effect on January 1, 1948. Its creation was a response to the economic turmoil of the Great Depression and the World War II, which had left the world economies battered and trade networks disrupted. The GATT was intended to provide a framework for global trade that would prevent countries from resorting to harmful protectionism and promote free trade practices.

The GATT set rules for trade, such as reducing or eliminating tariffs on goods imported and exported between signatory countries, and established the Most Favored Nation (MFN) status. The MFN status ensured that all member nations would be treated equally regarding trade and granted them the same advantages as the host country. The GATT also recognized that developing countries would need special treatment, and it provided preferential treatment for them.

The GATT`s success was immediate, and it laid the foundation for the global trading system that we know today. However, the agreement had its limitations and was criticized for its inability to address issues such as intellectual property rights, services trade, and environmental protection. These shortcomings led to the creation of the World Trade Organization (WTO) in 1995, which replaced the GATT and expanded its mandate beyond just reducing tariffs.

In conclusion, the General Agreement on Tariffs and Trade (GATT) went into effect on January 1, 1948, a year after it was signed by a group of nations seeking to promote free trade practices in a world that was reeling from the effects of the Great Depression and World War II. The GATT`s success paved the way for the creation of the WTO, which expanded the scope of the GATT`s mandate and provisions.