International Trade Organization

From Wikipedia, the free encyclopedia

The Bretton Woods Conference of 1944 recognized the need for a comparable international institution for trade (the later proposed International Trade Organization (ITO)) to complement the IMF and the World Bank.^[1] Probably because Bretton Woods was attended only by representatives of finance ministries and not by representatives of trade ministries, an agreement covering trade was not negotiated there.^[2] Nevertheless, the Conference did

In early December 1945, the United States invited its war-time allies to enter into negotiations to conclude a multilateral agreement for the reciprocal reduction of tariffs on trade in goods. In July 1945 the US Congress had granted President Truman the authority to negotiate and conclude such an agreement. At the proposal of the United States, the United Nations Economic and Social Committee adopted a resolution, in February 1946, calling for a conference to draft a charter for an International Trade Organization (ITO). A Preparatory Committee was established in February 1946, and met for the first time in London in October 1946 to work on the charter of an international organization for trade; the work was continued from April to November 1947. At the same time, the negotiations on the GATT in Geneva advanced well and by October 1947 an agreement was reached: on October 30, 1947 eight of the twenty-three countries that had negotiated the GATT signed the "Protocol of Provisional Application of the General Agreement on Tariffs and Trade".^[3]

In March 1948, the negotiations on the ITO Charter were successfully completed in Havana. The Charter provided for the establishment of the ITO, and set out the basic rules for international trade and other international economic matters. The ITO Charter, however, never entered into force; while repeatedly submitted to the US Congress, it was never approved. The most usual argument against the new organization was that it would be involved into internal economic issues.^[4] On December 6, 1950 President Truman announced that he would no longer seek Congressional approval of the ITO Charter.^[5] In the absence of an international organization for trade, countried turned, from the early fifties, to the only existing multilateral international institution for trade, the "GATT 1947" to handle problems concerning their trade relations. Therefore, the GATT would over the years "transform itself" into a de facto international organization. It was contemplated that the GATT would be applied for several years until the ITO came into force. However, since the ITO was never brought into being, the GATT gradually became the focus for international governmental cooperation on trade matters^[6]

Seven rounds of negotiations occurred under GATT before the eighth round - the Uruguay Round - concluded in 1994 with the establishment of the World Trade Organisation (WTO) as the GATT's replacement. The GATT principles and agreements were adopted by the WTO, which was charged with administering and extending them.

[edit] Notes

^ P. van den Bossche, The Law and Policy of the World Trade Organization, 79
^ Palmeter-Mavroidis, Dispute Settlement, 1
^ The negotiationg countries decided to bring the provisions of the GATT into force immediately. Nevertheless, they also feared that to spend the political effort required to get the GATT through the legislature might jeopardize the later effort to get the ITO passed. Therefore, they preferred to take the ITO Charter and the GATT to their legislatures as a package. To resolve this problem, eight of these countries signed the PPA(P. van den Bossche, The Law and Policy of the World Trade Organization, 80).
^ P.B. Kenen, The International Economy, I, 376
^ P. van den Bossche, The Law and Policy of the World Trade Organization, 80
* Palmeter-Mavroidis, Dispute Settlement, 2
^ P. van den Bossche, The Law and Policy of the World Trade Organization, 81
* J.H. Jackson, Managing the Trading System, 134

[edit] References

Bossche, Peter van den (2005). "The Origins of the WTO", The Law and Policy of the World Trade Organization: Text, Cases and Materials. Cambridge University Press. ISBN 0-521-82290-4.
Jackson, John H. (1994). "Managing the Trading System: The World Trde Organization and the Post-Uruguay Round GATT Agenda", in Peter B. Kenen: Managing the World Economy: Fifty Years after Bretton Woods. Institute for International Economics. ISBN 0-88132-212-1.
Kenen, Peter B. (1999 – first published 1994). "The Evolution of Trade Policy", The International Economy (Volume I), Third (in Greek – translated from English by Andreas Sokodimos), Athens: Papazisis (in English: Cambridge University Press). ISBN 9-60021-365-8.
Palmeter, N. David; Mavroidis, Petros C. (2004). "Overview", Dispute Settlement in the World Trade Organization: Practice and Procedure. Cambridge University Press. ISBN 0-521-53003-2.