The Bretton Woods Agreements

GATT paragraph :

The United States is a signatory-founder of GATT, although Congress has never ratified the General Agreement. So from that time world trade has become a strong component of the foreign policy of the United States, which are in fact an integral part of US legislation. In this regard, it is significant that the agreements of the Tokyo Round (September 1973-April 1979), for example, do not have received approval from the US political authorities.

OMC :

The WTO's mission is to encourage globalization while ensuring control of its consequences. It shall ensure to preserve a balance between the nations and to make compatible the sovereignty of states and interdependence of economies. The WTO has helped to defuse conflicts, particularly between Japan and the United States (automobiles, semiconductors, photographic film).

Bretton Woods :

The Bretton Woods agreements are economic agreements which have drawn the outline of the post war international financial system in 1944. Their main objective was to establish a world monetary organization as well as to ease the reconstruction and economic development of the countries affected by the war.

They were signed 22 July 1944 in Bretton Woods in the United States after three weeks of debate among 730 delegates from all 44 Allied nations.

The Bretton Woods agreements have their roots in the Great Depression economic (the great crisis of 1929). The surpluses of the economy having collapsed in the 1930s, governments around the world adopted a range of protectionist policies, which finally crippled international trade. To maintain employment, governments (and corporations, for that matter) encouraged the production of goods at the same level, although mutual tariff barriers would have banned the sale of those products abroad.

The scope of Bretton Woods was huge, because for the first time in human history, a monetary and financial system at global reach has been proposed, and it was adopted by the major economic powers of the planet. This system worked well as the United States had a trade surplus offset by massive capital outflows, which allowed to feed the "hungry dollars" from the rest of the world. When the US trade and budget deficits have started to grow, the system was faced with the "Triffin paradox": to limit their deficits, the United States had to adopt a deflationary policy, which deprived thereby the rest of the world dollars and thus risked provoking widespread deflation.

However, if the United States continued to provide liquidity to the world, they could not contain their "twin deficits". A possible solution lay in the shift of a dominant international currency (the dollar) to a common international currency but this would obviously worn prejudice to the status of the dollar. That's why Nixon, August 15, 1971, has unilaterally suspended dollar convertibility, thus benefiting from the expansionary effect of the devaluation of the dollar.

Finally, Bretton Woods took advantage of the tremendous economic expansion of the postwar period, allowing the catching of the United States by non-US Western economies. This was also the medium on which is built the EEC (1957), whose first stone Economic undoubtedly been the European Payments Union (EPU, 1950).