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Summary of the Founding of the Postwar System

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The Founding of the Postwar System
The foundation of the multilateral trade system we know today was decided in the years after the Second World War. In the end of the war the United States had emerged as a superpower and now wanted to promote its trade relations and realize the vision of a great assembly of international institutions with themselves at the top.
The interwar experience showed that there is a clear relation between national macroeconomics and external economics so in order to expand trade and development the US wanted to use the “classic economic goals” of free movement of goods, people and funds.

In order to realize their vision, the US already discussed their new trade regime and new system of global economic relations ideas with Britain during WW2 but no distinct and concrete proposals were made until 1945. America’s proposals for the new regime included among others the international acceptance of their concepts of freely competitive, private enterprise systems on the basis of “nondiscrimination” and “national treatment” as well as the call for removing quantitative trade restrictions. The British on the other hand wanted the maintenance of high level of employment to be included. This was related mainly to inner country affairs but justified the use of quantitative import restrictions.

The above mentioned drafts were discussed on several international meetings, peaking in the conference at Havana in 1947. The Havana charter, America’s and Britain’s attempt to create a new trade regime failed but nevertheless there was one positive outcome of the conference: the General Agreement on Tariffs and Trades (GATT). GATT was based on already existing bilateral trade agreements which were changed to now one single multilateral agreement. Its principles included among others reciprocity, nondiscrimination and national treatment and acknowledged

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