Modern Multilateral Trading System During World War II Essay

Modern Multilateral Trading System During World War II Essay

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Introduction

After World War II, the foundation of the modern multilateral trading system was laid by the victor nations, especially Britain and United States, as this became a period favorable for large advances to be made in international trade liberalization and cooperation between nations. The leading countries, agreed on the roots of the political and economic straggles of the inter-war period and wanted to construct an international economic system that would resolve and prevent war through the United Nations by establishing three international economic institutions under the Bretton Woods Conference of 1944; the three institutions were the International Monetary Fund (IMF), The World Bank, and the international Trade Organizations (ITO), and the philosophy of these institutions is based on classical economic neoliberalism. (WTO and Preferential Trade Agreements)
However, on 1947 the ITO was replaced later on by the General Agreement on Tariff and Trade (GATT) as the U.S. Congress refused to agree to the ITO based on the grounds that it would give in too much power over the United States sovereignty to the international institution.

General Agreement on Tariff and Trade (GATT)
1947, The GATT had many of the same provisions as the ITO as an international trade organization and umbrella organization for multilateral trade negotiations. The first five rounds of multilateral trade negotiation the GATT succeeded in lowering tariffs which then were the major barrier to free trade by reducing and average trade weighted tariff from 50% to 12%.
As part of dealing with rising problems the GATT employs a series of multilateral negotiations also know as “trade rounds”. The first round was in 30 October 1947, and it was composed of...


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...ir economies, attributed to the failure of the 1994 Uruguay Round, where tariffs were converged into barriers to farmers who had to lower their quota which group opt to impose “special safeguards” to protect themselves. LDCs argue that the GATT provides a guard on protection DCs countries to keep up setting prices and asking for lower taxes, out-ruling the principle of reciprocity and equality. (www.economist.com)
In concern, affected members declare the WTO to be too powerful for its own good as tries to dictate laws and regulations by imposing free trade rules to sovereign states. Also, the thought of the WTO look out for the rich is not to far from reality when actually is being run by the rich for the rich. Ultimately, the call for democracy by the WTO become in shame when its hearings on trade disputes are closed to the public and the media. (www.news.bbc.co.uk)

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