Essay --

Gilpin observed that the establishment of the World Trade Organization (WTO) on January 1, 1995 as the principal forum for trade liberalization marked the biggest reform of the international trading system since the end of the Second World War. In this paper, I will provide an analysis of the evolution of the international trading system from its inception as the General Agreement on Tariffs and Trade (GATT) to its incarnation as the World Trade Organization (WTO), taking into account the changing international economic environment and political realities. This paper comprises of three parts. The first part outlines the historical context in the creation of GATT; the second part gives a brief synopsis of its structure and functions, with the third covering the paradigm shift in events that brought into existence the WTO intended to regulate an ever increasingly market-oriented global economy. Established in 1944 and taking its name from the New Hampshire town where the agreements were drawn up, the Bretton Woods conference was a gathering of finance ministers from Allied countries following the end of the Second World War. Under American leadership, the group met to discuss the failings of World War I’s Treaty of Versailles and the creation of a new international monetary system which could fund post war reconstruction, economic stability and facilitate international trade. This conference led to the establishment of two of the most important post war economic institutions, the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank (An introduction to the WTO and GATT, pp. 42, 2003). Originally, the architects of the international trade system in the post war ... ...requests from other members and notify the WTO of changes to its trading policies. This clause is provided to help improve predictability and stability to the international trading system and discourage the use of quotas and other measures used to limit the quantity of imports. Today, the WTO membership numbers 146 which comprises of approximately 97 per cent of the worlds’ trade (www.WTO.org). The evolution of GATT to the WTO was a significant step towards liberalising markets and ushered in a new era of free trade. Although the WTO is still a relatively young international institution, its origins are rooted in the Bretton Woods conference following the end of World War II. The WTO has evolved to cover areas such as trade in goods and services as well as Intellectual Property Rights (IPR) and continues to provide the key disciplines affecting international trade.