Free Trade and Freedom to Trade: The Development Challenge to GATT, 1947–1968

Abstract

During World War II, bureaucrats, diplomats, and politicians drew up blueprints for several international organizations to manage the postwar global community. Their work was sustained by a planning Zeitgeist that reflected certainty that the international community could be made more peaceful, urgency that such a task had to be undertaken, and confidence that international institutions could restrain narrower self-interest that undermined international collaboration. Alongside the United Nations, International Monetary Fund, World Bank, United Nations Relief and Rehabilitation Administration, Food and Agricultural Organization, and World Health Organization, there was a spot for the International Trade Organization (ITO). British and American wartime governments took the early lead in mapping out an organization dedicated to freeing world trade. This would be achieved through rounds of tariff negotiations in which pairs of states exchanged lower tariffs on goods relevant to their trading relationship. Once they had achieved a balanced exchange of concessions, the new tariff rates would be extended to all members of the ITO. Reciprocity, the most favoured nation principle, and non-discrimination were the operating principles of the ITO. The geopolitical purpose of the ITO was similarly steeped in liberal thinking: trade forged connections between states, maximized prosperity, and stabilized the international community.