RutgersModelUnitedNations 5 time that economic stability and prosperity were directly linked to global peace. 2 A major proponent of this idea was Cordell Hull, the US Secretary of State from 1933 to 1944. According to Hull: [U]nhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war…if we could get a freer flow of trade…freer in the sense of fewer discriminations and obstructions…so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance of lasting peace. 13 It is due to this agreement among allied nations and the faith in the capitalist economic system that the Bretton Woods system was ratified, and the foundation for the post-war economic recovery was set. From 1944 until 1971, when the United States terminated the convertibility of the USD to gold, all international trade was governed by the Bretton Woods financial system. 14 1947: The General Agreement on Tariffs and Trade (GATT) Shortly after the successful completion of the Bretton Woods conference, the General Agreement on Tariffs and Trade (GATT) was negotiated in Geneva, Switzerland on 27 April 1947 by twenty-three participating nations. The creation of the GATT was aided by the World Bank and International Monetary Fund (IMF), which were established three years earlier. 15 The GATT had 8 rounds of conferences from its initiation in 1947 until the final Uruguay round in 1993. At the final conference in Uruguay, the GATT decided to create the World Trade Organization (WTO). The GATT of 1947, the first round of negotiations in Geneva, aimed to "establish an orderly and transparent framework within which barriers to trade could be gradually reduced and international trade expanded." 16 As with the Bretton Woods system, the primary driving force of the GATT was the need for financial reform and simplification of international 13 Hull, Cordell (1948). The Memoirs of Cordell Hull: vol. 1. New York: Macmillan. pp. 81. 14 Stephey, M.J. "Bretton Woods System." Time Business. Time, 21 Oct. 2008. Web. 28 Feb. 2012. . 15 Croome, J. 1999. Reshaping the World Trading System: A History of the Uruguay Round. Kluwer Law International for WTO. 16 Ibid.
RutgersModelUnitedNations 6 trade. While the GATT established provisions for reducing tariffs and NTBTs for most member nations, it had major exceptions and loopholes in regards to agriculture. 17 Because most European nations were still recovering from the Second World War, the United States, being a major agricultural exporter of the time, imposed numerous tariffs and quotas on the agricultural aspect of trade within the GATT. Other nations, such as Australia, were also able to dictate trading policies that were most favorable to them at the time with little regards to the interests of LDCs. Since LDCs were heavily dependent on the exportation of agricultural products, their economic growth was significantly stifled. Overall, the GATT of 1947 is considered to be the start of a fundamental economic divide between the trade in developed nations and LDCs. 5 28 May 1975:Founding of Economic Community of West African States (ECOWAS) The period from 1947 to 1975 witnessed an economic boom of unprecedented proportions. However, the rift between the economic success of industrializing nations and LDCs also widened. 18 With the GATT contributing to the depreciation of agricultural products exported by LDCs combined with the imposition of strict import quotas on foreign goods by developed nations, the West African states sought to create their own trading bloc. ECOWAS consists of fifteen West African states that all contribute to and work with the West African Central Bank (WACB). 19 The purpose of ECOWAS is to harmonize the trade in the region and make African goods more competitive on the international market. ECOWAS also serves as a peacekeeping force in the region that is notorious for its religious confrontations, illegal mining and export of diamonds in Sierra Leone, as well as piracy in the Ivory Coast region. 20 Despite these challenges, the 17 5 Hathaway, Dale. 1997. Agriculture and the GATT: Rewriting the Rules. Policy Analysis in International Economics. Washington, DC, Institute for International Economics. 18 “Global Trade Liberalization and the Developing Countries -- An IMF Issues Brief." Web. 22 Feb. 2012. . 19 "ECOWAS in Brief." ECOWAS. 12 Mar. 2010. Web. 28 Feb. 2012. . 20 "West African Officials Call for Greater UN Involvement in Fight against Piracy." UN News Center. UN, 26 Sept. 2011. Web. 28 Feb. 2012. .