Final answer:
The General Agreement on Tariffs and Trade (GATT) was a 1947 agreement designed to boost postwar economic recovery by reducing trade barriers, which eventually transformed into the World Trade Organization (WTO) in 1995.
Step-by-step explanation:
The agreement originally negotiated in Geneva, Switzerland, in 1947 to increase international trade by reducing tariffs and other trade barriers is known as the General Agreement on Tariffs and Trade (GATT). This agreement was established among twenty-three countries to support postwar economic recovery. The GATT provided a code of conduct for international commerce and served as a framework for periodic multilateral negotiations aimed at trade liberalization and expansion. Over time, it evolved and led to the creation of the World Trade Organization (WTO) after the Uruguay Round Agreement. The WTO, with a broader scope than the GATT, officially replaced it on January 1, 1996, setting the stage for free trade among its member countries and functioning as an organization that ensures nondiscriminatory trade, although allowing trade barriers under equal application to all member nations.
Many observers have recognized the creation of the WTO as a major step towards globalization—a movement towards a single integrated global economy. The WTO, although based in Geneva, has a global impact on trade and economic development while aiming to balance these with the protection of member countries' economies. It has faced criticism for potentially serving the interests of wealthy corporations at the expense of developing nations, a factor to be considered in understanding the complex legacy of international trade organizations.