Trade Agreements After Wwii

Dec 19, 2020
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Historically, openness to free trade increased considerably between 1815 and the beginning of the First World War. In the 1920s, trade opening resumed, but collapsed during the Great Depression (especially in Europe and North America). Trade openings increased again sharply from the 1950s on (albeit with a slowdown during the oil crisis of the 1970s). Economists and economic historians say the current level of openness to trade is the highest they have ever been. [6] [7] [8] After World War II, U.S. leaders felt it was essential to create international trade rules that would lead to a steady reduction of trade barriers. Policymakers felt that this was necessary to enable the global economy to recover from the ravages of the Great Depression and war, and that it would help prevent international conflicts that could lead to future conflicts. This step towards free trade was not just about the economy. Trade expansion was at the center of broader U.S. foreign policy during the Cold War.

With military alliances, trade agreements have helped link the major free-market democracies, their growing prosperity serving as an effective counterpoint to the centrally planned economies of the Soviet bloc and the People`s Republic of China. The removal of trade barriers was obviously not the only cause of this increase in trade, but it was probably one of the most important factors. Other developments, such as better and cheaper transport and communications, have also played an important role. Free trade policy can promote the following characteristics: [Quote needed] From the beginning of the 19th century, trade was a divisive issue in American politics – and the dividing line fell quite well between slave and non-slavery countries. Northern producers have called for high tariff protection on competing imports; Southern cotton producers have supported an open trade policy to promote their exports. After World War II, President Harry Truman used the RTAA as a power to negotiate the first multilateral trade round after World War II, the 1947 Geneva Round between the United States and 22 other countries, which reduced tariffs on a large number of products. [12] The results of the Geneva round were then codified in the new General Agreement on Tariffs and Trade (GATT) [13], which President Truman implemented under an executive mandate under the authority of the RTAA. [14] In 1995, GATT became the World Trade Organization (WTO), which now has more than 140 member states. The WTO controls four international trade agreements: the GATT, the General Agreement on Trade in Services (GATS) and the Trade-Related Intellectual Property Rights and Trade Investment Agreement (TRIPS and TRIMS).

The WTO is now the forum for members to negotiate the removal of trade barriers; The most recent forum is the Doha Development Round, launched in 2001. Harvard economics professor N. Gregory Mankiv quotes: “The proposals have such a broad consensus among professional economists that opening up world trade increases economic growth and living standards.” [25] In a survey of leading economists, no one objected to the idea that “freer trade improves productive efficiency and provides consumers with better choice, and in the long run, these benefits are far greater than all the effects on employment.” [26] As noted above, the pillar of the GATT was to grant all concessions to all GATT Member States.

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