2 - The Negotiation of the GATT

Summary

During the 1940s, as Chapter 1 described, the United States wanted to establish a new multilateral institutional architecture, a component of which would be devoted to the reconstruction of world trade. After the release of its proposed Charter in December 1945, the United States took concrete steps to bring this about: in February 1946, the U.S. delegate to the United Nations proposed that a resolution be adopted in order to convene a United Nations Conference on Trade and Employment, the purpose of which would be to draft the Charter for an International Trade Organization (ITO), also referred to as the Havana Charter. The General Agreement on Tariffs and Trade (GATT) would be an off-shoot of the broader and more ambitious ITO project.

The GATT was drafted in a series of negotiations of the so-called Preparatory Committee for the ITO held between 1946 and 1948 in London, New York, Geneva, and finally in Havana. The Preparatory Committee was established pursuant to the 1946 UN resolution mentioned above. The Havana Charter was supposed to regulate government policy with respect to trade (e.g., trade in goods and commodity agreements), as well as establish rules regarding domestic employment, investment, economic development, and restrictive business practices (RBP). The ITO was negotiated subsequent to the Bretton Woods negotiations, which led to the creation of the World Bank (WB), and the International Monetary Fund (IMF).