GATT is a multilateral treaty among countries (117 in 1994) whose purpose is to liberalize and expand trade through negotiated reductions in trade barriers. It covers both agricultural and industrial products. GATT provides a forum in which countries can discuss and resolve trade problems and provides contractual rights and obligations for contracting parties to challenge formally other members' trading practices. The agreement is composed of five basic principles, which attempt to prevent the retaliatory trade wars that can develop from escalation of trade barriers.

Since its inception there have been eight "rounds" of intergovernmental tariff negotiations. Agreements on the reduction of agricultural trade barriers have been difficult to achieve. The most recent round completed in Uruguay built on the successes of the Tokyo Round and addressed market access, international trade in services, investment restrictions, intellectual property rights, and better integration of agricultural and textile areas into the overall trading system. Virtually all tariffs in 10 vital industrial sectors with key trading partners were eliminated. These vital sectors included construction, agriculture, medical equipment, steel, beer, brown distilled spirits, pharmaceuticals, paper, pulp, and printed matter, furniture, and toys and will be effective between the United States, European Union, Japan, Austria, Switzerland, Sweden, Finland, Norway, New Zealand, Korea, Hong Kong, and Singapore.