The World Trade Organization: Changing International Policies

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In July of 1944, in the midst of World War II, the Allied nations gathered at Bretton Woods, New Hampshire to discuss the new world order in trade and finance that would be instituted once the fighting stopped. The states at Bretton Woods embraced the philosophy of commercial liberalism, pursuing free trade in open markets, and the removal of any barriers to this trade and its resulting capital. Seeing commercial liberalism as a solution to conditions and woes that caused World War II, they believed that applying laissez-faire economics (as theorized by Adam Smith, David Ricardo, and John Maynard Keynes) at the international level would “promote more equal access to scarce resources, attract foreign capital and expertise, and foster competition – which generates pressure for increasing efficiency to lower production costs” (Kegley 305). Opening the world’s markets would create interdependence, increase communication, and states would want to solve their problems diplomatically, instead of with war, to avoid a loss in their investments. The nations at the Bretton Woods conference agreed to create three “pillars” for this new strategy: the World Bank for Reconstruction and Development, the International Monetary Fund, and the International Trade Organization (ITO). The ITO would be the engine for expanding world trade. The ITO became ensnared in negotiations, and states decided that they needed a temporary solution until the ITO could be established, so they signed the General Agreement on Tariffs and Trade (GATT), fulfilling the push towards commercial liberalism (Kegley 146).
One of the clearest ways that GATT changed international policy is that it altered the basic nature of trade agreements themselves. Before the GATT treaty was signed, trade agreements were bilateral, or between two states. A nation would have individual agreements with each of its trading…...

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