THE WORLD TRADE ORGANIZATION:

The 1944 Bretton Woods agreement sought to prevent the recurrence of the economic situation that had prevailed in the Depression-permeated 1930s by laying down the framework for a more adequately regulated international economic order. The agreement originally stipulated that oversight of the world economic system was to be in the hands of three institutions: the International Monetary Fund (which was charged with overseeing exchange rates and the balance of payments), the International Bank for Reconstruction and Development, better known as the World Bank (which was to be responsible for economic development), and the International Trade Organization (whose brief was the supervision of the world trading system, with a particular responsibility for mediating trade disputes, promoting tariff reduction, and eliminating trade wars). However, when the US Congress objected to the formation of the International Trade Organization, the agreement was modified to exclude the ITO provision, and a looser organization, the General Agreement on Tariffs and Trade (GATT) took its place. GATT was basically a forum constituted by agreement among signatory nations, and with a limited administrative machinery to undertake oversight of the world trading system and the trade liberalization arrangements it sponsored, GATT’s effectiveness was always going to be circumscribed, and it was superseded in 1995 by the World Trade Organization (WTO)