From the initial membership of 23 countries, the GATT has grown to 128 countries, responsible for about four-fifths of world trade. In eight rounds of negotiations or “cycles”, GATT member states continued to reduce tariffs, establish anti-dumping rules and increase the level of international trade. The U.S. State Department also found good use of free trade expansion after World War II. Many in the Department of Foreign Affairs saw multilateral trade agreements as a means of integrating the world in accordance with the Marshall Plan and the Monroe Doctrine. U.S. trade policy has become an integral part of U.S. foreign policy. This search for free trade as diplomacy intensified during the Cold War, when the United States competed with the Soviet Union for relations around the world. [20] When U.S. tariffs fell dramatically, global markets were also increasingly liberalized.
Global trade has undergone a rapid transformation. The RTAA was a U.S. law, but it provided the first widely used system of guidelines for bilateral trade agreements. The United States and European nations began to avoid beggar neighborhood policies that pursued national trade objectives at the expense of other nations. Instead, countries have begun to realize the benefits of trade cooperation. Under the leadership of the United States and the United Kingdom, international cooperation has flourished and concrete institutions have been created. The discussions that began at the Bretton Woods Conference of 1944 were the International Monetary Fund. The first international trade agreement, the General Agreement on Tariffs and Trade (GATT), was established in 1949.
In 1994, THE GATT was replaced by the World Trade Organization (WTO), which still controls international trade agreements. [20] [21] Between 1934 and 1947, the United States entered into separate trade agreements with 29 foreign countries. The Customs Commission found that U.S. tariffs were reduced from an average of 48% to 25% on average over the 13-year period when it used duty-subject imports in 1939 as a basis for comparison. Secretary Hull`s first efforts were to reach reciprocal trade agreements with Latin American countries, a region considered crucial to U.S. trade and security, where rival powers (particularly Germany) have gained ground at the expense of American exporters. However, until September 1939, Hull was only able to negotiate agreements with three out of ten South American countries, because the trade agenda was opposed by Latin Americans, who opposed the most favoured national requirement to abandon all bilateral agreements with other countries.
